London Property market is active but tentative.
Investors want the right deal.
On Wednesday 10th October, PropVestment attended the McHugh & Co Auction in London’s BAFTA with a client and prospective bidder. We observed some interesting trends from the lots and bidders.
There were a total of 32 lots, however only 19 were sold on the day or prior. So there was only 59% success rate. This shows that where sellers are keeping prices too high and investors are smart enough to hold back. This is contrast to a year ago when it seemed that almost anything was selling in the auctions. PropVestment wrote that auctions were for selling rather than buying.
The Highest Bid average was 13% above the guide price, however the Winning Bid was on average 28% above the guide price. This shows that the guide is reasonable but sellers are keeping higher reserves than guide. On all 11 occasions where Reserve Not Met, the highest bid was above the guide price.
Average Selling Price was £311k, in constrast to the £260k for the McHugh & Co Auction in February 2012. This suggests that the market has picked up in terms that higher value lots a more active in the market.
No Lot was sold below guide price, this suggests that for the 40% of lots not sold the reserve price was too high. Sellers still are holding out to prices too high for the market.
McHugh & Co Auction London Property Market Bargains
- Studio Flat in West Kensington: £127k , Rental £12,480 9.8% Yield . Perfect for a first time buyer.
- 2 adjoining Semi-Detached House, with 8 en-suite rooms, off street parking in North Finchley. There were No Bibs. Guide was £600k but an offer under that could be accepted. Lot 19
- Freehold building, Ground rent for ground floor and Vacant possession first floor, 3 Bedroom maisonette. Walking distance from Barnet General Hospital, High Street and London Underground station. £190k
McHugh & Co Auction London Property Market Bank Busters
- 3 Self contained flats in NW3, sold for £1.05m , 40 % over guide
PropVestment Property Investor market conclusion
London property market has always been on that is more resilient in hard times and the property market first to show signs of recovery. It seems that London prices have become for stable and realistic. The good property deals are being snapped up but unrealistically high priced lots are being left alone. Overall positive observations for a more stable and sustainable property investor market to be in.
Auctions are a fantastic place to buy and sell property, but be cautious and understand each property is different.