The time is now ripe for first time buyers at auction19.08.2016
As the head of the Sussex branch at Auction House - the UK’s most successful property auctioneer – our auction department can confidently say that the time is now ripe for first time buyers to enter the auction room.
Auction Manager Nick Muston FRICS is noticing an increase in the number of first time buyers at the company’s sales, marking a big change from the days when cash-ready buyers were invariably the winning bidders.
He explains: “The introduction of the 3% Stamp Duty surcharge favours those buying for occupation – or what I call ‘buy-to-live’. Auction now provides a real opportunity for first time buyers to get a foot on the property ladder. Together with a plentiful supply of mortgage funds and this month’s drop in the base rate to a record low level, all the ingredients are in place for first time buyers to fare very well.
“We are seeing examples of mortgage offers being issued within two weeks of application and there are deals around now where lenders are waiving application fees so there are first time and family buyers in our auction rooms with mortgage offers in place without any upfront spend.
“Others are using funds from short term lenders to acquire unmortgageable properties for speedy refurbishment prior to occupying after remortgaging with a conventional lender. This new scenario has broadened the mix of buyers in our regional sale rooms and the good news for our vendors is that those buying to live will usually pay a higher price than investors and traders.
Auction House reported better-than-expected results in July, despite the post-Brexit slowdown which dampened expectations going into the month. The group sold 385 lots from 526 offered, delivering a success rate of 73% and raising a total of £50.5 million.
Commenting on the figures, Nick added: “The Brexit factor led to forecasts of doom and gloom which in reality we found to be wildly exaggerated. Whilst uncertainty is never helpful, and auctioneers had to be more selective with the stock being offered in their rooms, we still managed to achieve a very successful month of sales.
“We now expect an early return to normal trading levels as we move into the autumn. The attraction is that auctions provide certainty for the seller too and with the speed that is often required. So we see the climate continuing to favour auction through to the end of 2017 and beyond.”