When it comes to selling property, an auction is still often seen as a last resort but for the right lot in the right sale it can be one of the best options, whether it's an office block or a country cottage.
The market determines what the property is worth and that’s what it will go for on the day. While it won’t suit everyone and everything, the speed, transparency, certainty and sense of competition can be real advantages.
Generally, the stock that comes to market via auction requires refurbishment or renovation, and there is currently an appetite for properties with lower EPC ratings as buyers will be planning to upgrade the energy efficiency of homes and premises as they develop them.
The key to success is the likely level of demand, so what are bidders looking for?
Residential
Bidder registrations continue to increase, and the level of competition we are seeing is a good indication of how strong the appetite for buying residential stock is at the moment, particularly where there’s a chance to add value. There is a real sense that buyers want to put their money into something tangible that they trust and understand, and many view residential property as the route to doing that.
In addition, the recent low levels of stock available in the housing market has undoubtedly brought more people to auction who simply haven’t been able to find what they are looking for.
We are also seeing more returning bidders than ever before. Over half the bids submitted in our April sale, for example, came from those who had registered for previous sales. Our bespoke bidding system really helps with this as these buyers have already supplied the required details and registered so simply have to add the lots they are interested in to their account to bid again at the next auction.
Commercial
Demand for commercial stock is incredibly strong – the relaxation of planning regulation over the past few years has blurred the boundaries between the property sectors, and generally buyers seem most focused on the opportunity presented.
As a result, we are seeing some purchasers who’d traditionally transact on residential assets now beginning to show an interest in investing in commercial lots. Often they are keen to diversify their portfolio due to higher purchasing entry and running costs associated with their existing residential stock. Largely they will be focused on yield or will be looking to take on a mixed opportunity, while lower buying costs, longer-term tenancies and the ability to add value through asset management are other key drivers which are bringing them into a new area of real estate.
All of this has meant an increased pool of commercial buyers and arguably the stats speak for themselves; the commercial lots at one of our recent auctions sold for, on average, 37 per cent above their guide price.
In addition, anything with multiple income streams or a development angle is continuing to prove very popular, particularly if close to London or key regional towns and cities.
If a property comes with the potential to convert excess space to rent out to another commercial tenant or convert to residential use, this also ticks a lot of boxes. Ultimately, we continue to find that stock which allows a buyer to add value or have a steady medium-term income will usually command strong interest.
Whether you are buying or selling, with demand for both residential and commercial property at auction it may well be worth discovering what you can find under the hammer.
Further information
Register to bid or view preliminary lots at Savills next property auction on Tuesday 14 June here
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