Wednesday 3rd December was the last McHugh & Co auction of 2014. Focusing on residential property in London this auction gives a good indication of the state of the London property market.
PropVestment attended the auction on the instruction of client’s interested in some of the lots on offer. Here is how it went:
- Only 50% of the lots sold
- Development lots sold the best, 5 of the 8 sold, at an average of £1.865m which was on average 55% above the guide price.
- Houses did not sell well, only 3 of 9 selling, at an average of £499k, on average 17% above guide price. For the ones that did not sell, reserves were not met at an average of 3% above guide price.
- Flats sold fairly well, 6 out of 10, at an average of 34% over guide price.
- Lots in Zone 1 & 2 sold well and above guide, however many outside central areas did not sell.
- Lots sold by councils, or trusts sold well, where as private sellers seemed to keep high reserves.
London property analysis
Developers were hungry for prime development lots in good locations, where there is confidence that final products will sell and where there is potential to achieve higher values. However locations away from prime residence or commercial zones did not fair so well. Some lots were offered by London Borough of Camden, the ones on normal residential streets sold well, but ones in proximity to estates and tower blocks did not. Council are cashing in.
Flats sold well, these are properties that are more affordable and hence there is greater demand.
Luxury houses suffered, where sellers are anticipating very high prices. The irony is that with the Stamp Duty announcement in the Autumn Statment these properties will be less desirable and therefore sellers will not achieve the prices they want.
Another factor that may contribute to slower sales is the up coming holiday season, with many auction lots requiring 4 week completions it is not desirable or possible to complete. Auction purchases require greater legal scrutiny and finance is still difficult.
For advise, appraisals or general consultancy on London property feel free to get in touch: info@PropVestment.com
Note: PropVestment only attended the first 30 lots on offer, data is from first hand observation, although we aim to provide accurate information this information is not verified with McHugh and Co.