Musings of a London Property Finder

The Allsops auction today sold well with bargains galore but at reasonable prices for an auction, which proves there is an appetite for property priced correctly in London and the South East.  The plethora of residential investments were selling at approximately 8% yield.  Most of the vacant residential stock was at the lower end of the market but there were a few more desirable gems sold for a song.

Lot 87, a five storey house on busy Kennington Park Road was sold for £600,000, approximately half that of neighbouring 237 and 335 which sold for £970,000 and £1.15m respectively, last August.  Presumably even a canny investor would want to spend upwards of £100,000 on the property but doing so could make it a spacious 3 or 4 bedroom family house with further bedrooms /playroom/ independent flat or gym and media room in the basement.

Lot 92, a four bedroom house in Wooten on the Isle of Wight, looked over-priced for an auction at £320,000 and didn’t sell.

A freehold 2 storey Victorian 3 bedroom house was sold in Walworth for £215,500, less than a new-build 2 bed flat on the market round the corner and only a little over the price of a 3 bed flat in a period housing association block.

Lot 135 also looked good value for a 2/3 bed Victorian cottage in Newhaven.  Not since 2002 have homes on this road been sold so low – this made £105,000 and would have sold for circa £160K last year, done up.  The problem is that renovations cost the same at this end of the market, but there is little room for profit unless the buyer plans to do the work themselves.  For this reason, auction prices in London and the South East still aren’t low enough to attract investors in droves, which bodes well for the ability of property prices to continue to stand up in these areas.

Good quality new build also made an appearance with 2 four bedroom houses sold in Oxley Park, Milton Keynes.  But despite the gloom mongering in the press, at least one of the owners still made money:  Number 2 sold for £189,995 in June 2006 – presumably the ‘brand new’ price and made £267,000 today at auction, so hopefully after paying off the mortgage and other debts, the owners will still be able to pocket a tidy sum.  But the trick is in the buying.  Another new-build repossession in Knight Road in Rendlesham, Suffolk was bought in 2005 for £340,000 and was sold today at auction for £185,000.

A speculative bidder picked up a backland site with vehicular access in Northolt, London for £30,000 which should net a minimum 300% profit in a few years or double that if they decide to build. 

All in all, this was a solid auction, with c. 50% investment property.  Vacant residential stock was mostly priced under £400,000 and sold for around the guide price or 20-25% below the price if sold through an estate agency.  Given that at the bottom end there is little room for making profit since inevitably renovations are required, this shows the appetite for property in London and the South East and bodes well for the housing market in these areas.  The London Property Finder says auctions are good places to buy!

Technorati Tags: Auctions, Bargains in Souh East, House price bargains, london auction property, London Property Finder

Tags: Auctions, Bargains in Souh East, House price bargains, london auction property, London Property Finder

London Property Finder

Barnard Marcus had a good auction last week with sales reaching 82pts which is about where sales have been for some years – excluding the 2nd quarter of this year.  I.e. auction houses generally sell between 75pts and 85pts of their stock during the good times.

London property was in short supply but in general values also held their own: only four houses didn’t sell and of those the margin betwen final offer and reserve was between £5K and 25K.

12 Clitterhouse Road sold for £235K. £20,000 more than number 131 sold for in May of this year but £75K less than 111 and 27 which sold for £310 a piece in April and May respectively.  We suspect numbers 12 and 131 needed a little work, but even if they didn’t the auction price reflects a 24pts saving, which is roughly where you would expect to see the average auction property.

14 Preston Waye in Harrow sold for £400K, £20K over the reserve price but offering a 20pts discount versus number 9 which sold for £494,950 in March of last year.  We didn’t view either, so number 9 could be a palace in comparison, in which case this is even better news.

Why?  Because the auction market is pretty indicative of the market as a whole and if people are buying at 20pts off ‘market value’ at auction, then clearly there is hope for the homeowners in general.  In a good market, it makes sense for property at auction to be sold for 20-30pts below the neighbouring house sold through an estate agent.  It’s generally a distress sale. In a slow market – it is fabulous news.  It means prices are holding up in general because of the supply problem we have in London in particular.  The reason the housing market is a mess is because no-one wants to lend much to first time buyers or anyone else for that matter.  And when the credit crunch eases, the buyers market will disappear,  because more people want to have property in London than there are properties to go around.  To find a house quickly now before it is too late just contact this London Property Finder.

Technorati Tags: Auctions, Buyers market, London Property Finder

Tags: Auctions, Buyers market, London Property Finder