It’s been a busy year in the property auction sector. Auction House announced a year-on-year sales rise this October and passed its 3,000 lot milestone this December. As property auctions continue to evolve from the domain of developers and investors into an inclusive and accessible solution for all, 2018 should be an exciting time in the sector. With this in mind, here’s a rundown of our top auction trends which we expect to dominate sales in the near future.
Commercial assets will maintain a strong track record
We anticipate the high rate of sales success for commercial lots at auction to build in 2018 as a stronger than expected sector performance clashes with detrimental policy and uncertainty in the mainstream market. Both international and UK-based commercial investors will seek efficient, more affordable deals in the wake of the capital gain tax blow dealt in the Budget and the raise in stamp duty for residential property. Investments which offer good, low risk returns in what can be a volatile market will continue to play a key role at auction next year, so there’s good reason to feel confident in 2018.
Buy to let investors will be drawn to versatile auction lots
Portfolio and individual asset buy to let investors will recognise the win-win benefits at auction, both in the commercial and residential sector. We expect auction houses to continue to provide safe refuge for buy to let landlords weighing up their options.
By 2018, buyers and sellers will really be yearning for some stability in the property market. Many will find the transparent and binding nature of property deals at auction a relief, particularly in the buy to let sector which has been continually squeezed in recent years.
Expect competition to heat up
We’ve followed the evolution of property auctions with great interest. Whilst big franchises like Auction House have promoted the benefits of property auctions for many years, traditional estate agents are beginning to feel the buzz, too. A variety of property types are suitable to sell by auction, which is swiftly being extended to high-end, luxury property and substantial family homes which were once only sold traditionally. Now’s the time to familiarise yourself with the process so you can swiftly act on a property gem when you see one come on to the market.
Bidders will look to bypass leasehold terms
As usual, October proved a bumper month with all but two properties sold. The event revealed a big demand for good quality development and investment stock across the south coast. Investors, we find, tend to particularly favour freehold investments rather than leasehold investments, for example, freehold blocks with multiple flats, with or without a commercial element on the ground floor. Buying the freehold outright enables you as an investor to grow your property management portfolio overnight, with full control over what happens to the property and maintenance terms.
First-time buyers will try their hand
Property prices may be sluggish, but for first-time buyers, the marketplace still presents huge financial challenges, although the Stamp Duty Land Tax relief for first time buyers up to £300,000 will certainly help. As we’ve discussed, property auctions are ideal for first-timers: lots are often priced below market value, there are no hidden surprises, all costs are transparent and once the hammer lands, the property is yours.
As the myths surrounding property auctions slowly dispel, finance options expand and online options roll out, groups like first-time buyers and downsizers are expected to capitalise on the auctions trend. Watch this space!
Austin Gray has been holding auctions in Brighton and Hove for over 30 years, with an enviable reputation and high sales rate. As Auction House Sussex, covering the entire Sussex region, our team is now a part of the UK’s number one property auction brand.
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