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The impact from the political turmoil in September 2022 triggered a strong reaction within the money markets and with continuing rises in interest rates (10 successive ones to date), increased borrowing costs have certainly had a dampening effect on the property market, with considerable caution being exercised by many buyers. Following the first lock down in 2020, the combination of low interest rates, pent up demand and buyers with increased savings saw a surge in prices, particularly since there was a shortage of available stock. However, Rightmove reported that for the first time since the financial crash, average asking prices hadn’t increased at the start of 2023 and this adjustment in the market perhaps takes it back to pre-pandemic levels with added low levels of confidence.
One of the benefits of auction is that it helps to create a microclimate around any individual property. In attaching an attractive guide price, buyers come in ever greater numbers to the viewing sessions and in seeing strong interest from others, it helps to dispel anxiety about the future, giving greater confidence to bid higher and higher.
Lots are marketed within our catalogue, on the website and on all the major property portals, such as Rightmove and Zoopla. We also offer three open house viewing slots to applicable lots where anyone interested is welcome to just come along to view. People then have an opportunity to not only see the property but to see what the level of interest there is from other prospective buyers and to ask us questions about the property and the auction. This is an important point where we, the auctioneers, interact with buyers so we chose not to outsource this role to external viewing agents but to conduct these viewings ourselves, with full time staff from the auction department, in the weeks prior to the auction.
A good example of how well a property can sell was demonstrated in our February auction when we sold Dunster Gardens in Bedford. During a cold snap in December, this vacant four bedroom detached house suffered significant water damage following burst pipes. The agent who had been trying to sell the house with an asking price of £385,000 felt that given the damage and the owner’s need for a smooth sale now they were living in the USA, the auction route would be best so he recommended us. After having inspected the property and sent our report, the owners took the plunge and, wanting to be certain of a sale, actually set the starting price a little lower than our recommended amount. This certainly did the trick and with a steady stream of phone enquiries and very well attended viewing sessions, the property sold to a local buyer in the transparent and exciting atmosphere of the auction room for £380,000!
We are now taking lots for our next auction. To find out if your land or property is suitable or to book a free, no obligation auction appraisal, then please call Charles, Head of Auction on 01280 818903 or email charles.lovell@robinsonandhall.co.uk
One thing for certain is that if you want a quick sale, use auction.
Remarkably during 2020 and 2021 we managed to continue with our regular property auctions (albeit in a modified format) and achieved year on year growth. During most of that time we were prevented from hosting an ‘in-room’ sale, instead our Auctioneer, David Jones, offered lots via a ‘livestream’ platform whereby bidders and spectators could watch him taking successive bids from online, telephone or proxy bidders.
October 2021 saw us return to an ‘in room’ auction and the response was fantastic. Since then, our bi-monthly auctions have been extremely well attended and we hope to continue with all of our sales in 2023 taking place in our regular venue, the Delta Marriott Hotel in Milton Keynes, MK7 6HL which was formerly The Hilton, a venue we have used for 10 years now.
Despite the popularity of attending the auction in person, we have a significant number of bidders who either can’t attend or prefer to bid remotely so we have retained the livestream option, providing bidders the best of both worlds.
2022 has been another busy year for the auction department and we are already 10% ahead of the same period in 2021. The October catalogue sees another excellent range of lots and our thanks to the many partner agents who have referred lots to us. Certainly, the market as a whole saw stock levels throughout 2021 at extremely low levels and it was unsurprising, we experienced far fewer referrals from our partner agents than we normally do.
Another exciting change is that after a ten year affiliation with Auction House (an association of professional regional auctioneers), we are now relaunching as Robinson & Hall Auctions. We thank Auction House for our time with them and we wish them well for the future. We will continue to offer a first class auction service to sellers across the region, but with a new website featuring improved usability for our buyers and with the freedom to innovate in this ever-changing world.
With stock numbers generally improving we are only too pleased to offer those lots which are perhaps not so straight forward. Every year we have memorable lots, those which stick out because the sale price in the room far exceeded expectations. Last year who could forget Mad Dog Paddock, the name was enough but when it was offered with a guide of £125,000 none of us expected bidding to reach £450,000! This year we saw an ex local authority house in Northolt, West London, where the condition had been destroyed after years of being used as a cannabis farm The sellers knew the £150,000 guide would make it run but none of us expected it to achieve £470,000! Likewise in August, the overgrown tennis court we offered at £20,000 left many amazed when the gavel went down at £165,000!
The forecast for next year isn’t easy to call. The economy, inflation, the war in Ukraine, energy bills, all cause an effect which will be greater or lesser to different people. The general feeling though is that life for the majority will be tougher. People will have less disposable income and that, as far as the residential market is concerned will impact on borrowers, making it harder to meet lenders affordability criteria. If we see sales aborted due to lenders imposing unfair restrictions on buyers, more sellers may look to the simplicity of an auction sale. Likewise, those calling the top of the market are likely to seek the speed and certainty that only auction can offer.
We are now taking lots for our next auction.
New starters
Carly Bayford joins the Auction department as Auction Adminstrator, as matenity cover for Grace Hollingworth. She supports the team with all administrative tasks and is responsible for social media.
David Howard joins the Auction department as Leads Generation Manager and is actively involved in generating new instructions from Partner Agents.
If you would like to find out if your land or property is suitable for auction, please call Charles Lovell.
The arrival of a new style of auction to the market has prompted us to reaffirm our commitment to the traditional method of sale.
Charles Lovell, Head of Auction House Robinson & Hall, says that an increasing number of auction buyers and sellers have approached the company, seeking reassurance that future sales will continue to exchange on the fall of the hammer rather than several weeks later.
He explains: “For most people, the appeal of buying and selling at auction is that it is a quick, simple and convenient process. Sales are carried out on an unconditional basis with contracts exchanging as the gavel falls and completion following some 14-28 days later, or by agreement between the buyer and the seller. It’s the way we have always done it and certainly the way we intend to carry on doing it in the future.
“But a Modern Method of Auction (MMoA) has since become available, whereby the sale is conditional with the buyer merely securing a period of exclusivity before contracts are exchanged, which often takes more than a month with completion finally taking place after that.
“As well as the unreasonably high charges made to the buyer, the conditional method is slower, more cumbersome and much more prone to the problems that befall private treaty sales, indeed, the sort of difficulties many sellers deliberately choose auction to avoid!”
2022 has been another busy year for the auction department and we are already 10% ahead of the same period in 2021. We have sold 88% of lots offered this year to date.
Charles added: “The fact is unconditional auctions are in our DNA: it’s where we’ve always put our focus and it’s where we always will. Without doubt, they provide the best way of selling auction property in terms of both speed and security of sale.
“So, whether the sales are in-room, livestream or online, our commitment to unconditional auctions remains undiminished and we can confidently predict that in 2022 we will exceed last year’s sales figures.
“Therefore, our buyers, sellers and partner agents, old and new, can rest assured that our focus will remain unchanged, as we continue to offer a fair, transparent and cost-effective service, whilst always working on behalf of our clients to achieve the best possible price for each and every property.”
We are now taking lots for our next auction. To find out how Auction House Robinson & Hall can help you or to book a no obligation auction appraisal, please call 01234 362899 or email robinsonandhall@auctionhouse.co.uk
Charles Lovell, Head of Auction at Auction House Robinson & Hall, says: “The auction industry could end up benefiting from the forthcoming downturn in the property market because it provides the quickest and simplest solution to selling unwanted property.”
“Earlier this month the Bank of England announced a rise in interest rates of half a percent, the biggest increase in the cost of borrowing for 27 years. Many experts are predicting that inflation could hit 15% by the middle of next year. The UK is predicted to fall into recession later this year, with the longest downturn since 2008 expected and gross domestic product falling by as much as 2.1%. Together, this will inevitably have a significant impact on the mortgage market and the housing market in general.”
“But it also means that some buy-to-let landlords and investors will decide to divest themselves of part or all of their portfolio and the most obvious route for them to do so is by auction. In fact, it might mean an increase in the number of sales and amount of money raised on behalf of our clients.”
“If inflation reaches 15% as predicted, the only way to get it down is to increase interest rates. Last week’s rate rise of half a percent is going to pale into insignificance in the next 16 months, as rates will inevitably continue to climb.”
“We are starting to see more caution in the market, although attractively priced lots are still achieving strong sale prices. We are also hearing reports within the private treaty market of valuations being downgraded by lenders and deals taking much longer to complete.”
“That is not the case at auction, where both buyers and sellers appreciate the speed and certainty of the process, and the deal is done on the fall of the hammer. This is evidenced by our success rate of 88% year to date.”
“This is not to suggest that there will not be challenges ahead for the auction sector but we do have a degree of resilience not evident elsewhere. So, despite the softening of the market, we are predicting that the supply of lots to our auction and high rate of success of sale will continue in these uncertain times.
We are now taking lots for our next auction. To find out how Auction House Robinson & Hall can help you or to book a no obligation auction appraisal, please call 01234 362899 or email robinsonandhall@auctionhouse.co.uk
