- 2018 residential auctions raised £408m from 1,209 lots with a 79% success rate
- Lots within M25 comprised 38.7% of total lots, the largest of any region
- Companies are the highest proportion of vendors at 46%, increasing from 42% in 2017, while private vendors, particularly buy-to-let landlord, have decreased from 22% in 2017 to 20% in 2018
- Interest in ground rents increased from previous year
Allsop residential auctions raised a total of £408m from 1,209 lots with a sales success rate of 79%, outperforming the industry average of 74%, according to its 2018 Residential Auction Annual Review.
These figures were set against a background of increasing anxiety over a no deal Brexit as the year progressed. However, December 2018’s residential auction with £58m of sales and a success rate of 80% outperformed the previous year’s December auction with £43m sales and a success rate of 73%. Overall, the average price achieved for a single vacant residential unit in Allsop’s 2018 sales was £339,500m compared to £346,000 in the previous year. Across all ten regions, only two, the North East and M25, have shown an increase. This is anticipated to indicate further house price falls recorded in early 2019.
With uncertainty stalking the market, ground rents, which offer long-term security of income, remained a popular form of investment with a sales success rate of 92% compared to 89% the previous year. In 2018, 65 ground rent investments with in excess of 80 years unexpired were offered.
However, Brexit was not the only factor influencing investors. Financial pressure from the phasing out of mortgage interest tax relief, 3% stamp duty surcharge and tougher lending criteria, continued to bare down on private buy-to-let landlords in 2018. This made buy-to-let residential investment less attractive, particularly for small-scale private investors.
Property companies comprised the largest proportion of vendors at 46%, growing from 42% in 2017. Of the total number of vendors, private sellers made up 20% of buyers in 2018 compared to 22% in 2017. The increasing pressure to incorporate can be expected to increase this trend.
In terms of regional make up of lots, those within the M25 comprised the most at 38.7%, a fall from 43% sold in this region in 2017.
In 2018, the proportion of commercial properties, offering permitted residential development, sold was 4.5%, a decrease from 9% in 2017. This is attributed to fewer such properties coming to market, possibly due to potential vendors holding out and taking a wait and see approach to the market. But, demand for such assets remained strong.
Gary Murphy, Partner and Auctioneer, commented: “Despite a softening market with tax, a tighter lending environment and political uncertainty damping buy-to-let investment, we have sustained our auction success rate and outstripped the industry average. However, with demand for homes from the private rental sector continuing to grow, there is cause for those investors with the appetite to remain active in the market.
“As we move into 2019, we expect to see vendors who need to sell and achieve best value shrug off the ongoing Brexit uncertainty and carry on. Like last year, we anticipate that they will find eager buyers as long as assets are correctly priced.”
Notes to editor
About Allsop auctions
Allsop run the largest property auction departments in Europe through two highly experienced residential and commercial teams and is the UK’s number one auction house by transactions. We offer a wide range of lots covering residential vacant and investment properties, ground rents, land and development opportunities and secondary commercial lots. A minimum of six commercial and seven residential sales are held every year. Visit: http://www.allsop.co.uk/our-services/auctions/selling-at-auction/
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