If you have an eye for a bargain, or even a taste for the weird and the wonderful, property auctions are the place for you — and increasingly a place for first-time buyers too.
Auctions cover a wide variety: towers and ruined castles, bits of garden and chunks of woodland, redundant railway signal boxes, even a footpath with a posh postcode — which I thought would make a lovely present for someone.
But auctions are also a place for first-time buyers to find flats and houses that nobody would otherwise hear about. Many of these are being sold off by public authorities such as councils, the police and the Ministry of Defence, or by housing associations, building societies and banks.
The idea is catching on. A sale by the London auctioneer Harman Healy, in Kensington Town Hall at the end of last month, was full to bursting, with every seat taken and bidders up to six deep around the walls. The hall contained a cross-section of today’s property world: sharp suits here, a camel overcoat there, some tweedies, and a growing band of smaller developers and builders, in their sheepskins, parkas and baseball caps.
The effect of a rash of TV property programmes could be seen in the presence of new faces, with plenty of individual buyers around, including first-timers. The last are the anxious ones, clutching their info packs, and often leaving the room straight after a particular lot — grinning, or more likely disappointed that they never got a bid in. It’s fast and it’s competitive, with properties being banged down every three or four minutes.
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And there were some good buys to be had. My favourite lot was at King’s Cross: four self-contained flats in a period pile just a stroll from the new International Channel Tunnel terminal went for a total £510,000. Surely a snip — think of the rentals.
There were flats all across the capital going at between £150,000 and £200,000 — well above guide prices. Jamie Clarke, Harman Healy’s business development manager, says:
“Although perhaps 95 per cent of our buyers are property professionals, auctions are still a good place for first-time buyers.
“Property developers are largely after houses that can be converted into a maximum number of flats, or that are going particularly cheap because they need extensive structural repairs or building work to make them liveable and mortgageable. That still leaves bargains to be had for individual buyers, especially for flats in purpose-built blocks that won’t need a lot of work doing.
“The beauty of the auction,” he adds, “is that, when the hammer falls, you have exchanged contracts. That’s it, there’s none of the nightmare of gazumping or being stuck in a chain for months and months. And 28 days later the place is yours.”
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About 30,000 properties were shifted at more than 260 house auctions across the country last year. They ranged from individual lots — usually auctioned in village pubs — to regular catalogue sales in London and the larger cities. Allsop has a curious property on its books at its London auction on Thursday next week. It is at fashionable Brompton Cross, close to the King’s Road in Chelsea, but amounts to no more than a tiny flat roof and the air space above it. It sits on top of a studio flat, also for sale, and the gamble would be on trying to win planning consent for development. A guide price has been set of £5,000 to £10,000.
Also at that auction, Allsop is selling without reserve the Jumbo water tower that dominates Colchester. It is a listed building with planning consent for a four-bed house on top with 3,000 sq ft of living space. Who would want it? Well, at 131 ft the auctioneers say it might appeal to a City high-flyer with a big bonus to burn; or a fitness fanatic (159 steps to the top); or possibly an old-fashioned water tower enthusiast keen to preserve a bit of 1880s heritage. Allsop’s auctioneer, Gary Murphy, said it could go “for as little as £1,000 or more than £1 million”.
Guide prices generally are an awful lot closer than that, but beware of getting carried away and paying above the odds. Whether investing thousands or millions, always check the prices of similar properties. Add a healthy sum for any modernisation or improvements, then set yourself a ceiling and stick to it. Auctions can be very healthy for your finances; auction fever rather less so.
DO’S AND DON’TS
1. View the property yourself. It sounds silly, but it’s been known for people to bid “blind” and that spells disaster.
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2. Have the property surveyed.
3. Get a solicitor to look at the legal documents in advance (Harman Healy provides a legal pack at £10 for each lot).
4. Sort out finance for your bid beforehand, with a mortgage offer in place. Then you are in with a chance.
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6. Set a limit and stick to it.
AUCTION STATIONS
There are plenty of auctions coming up. Keep an eye on your local paper and search for residential auctioneers on the internet. There are several subscription auction search services such as www.auctionpropertyforsale.co.uk that will alert you to auction properties for sale by town, county or postcode.
The big operators in London — those with eight or ten residential auctions a year — include Allsop (its next sales are on Thursday next week and March 22; for details log on to www.allsop.co.uk), Savills (next sales on Monday next week and on April 3, www.savills.co.uk) and Harman Healy (next sales are on February 27 and March 29, www.harman-healy.co.uk). There are many more localised sales, too, so ask estate agents for the names of auctioneers.
With more and more people going to auctions, the Royal Institution of Chartered Surveyors has produced a guide for buyers and sellers called Going Once, Going Twice, Sold to . . . It has also updated its Common Auction Conditions booklet to establish standards across the country. For details see www.rics.org or call 0870 3331600.