Auction House, the UK’s biggest property auctioneer says there’s growing evidence that an increasing number of buy-to-let landlords are choosing to sell by auction rather than via estate agents.
Director, Roger Lake says that the argument is swinging back to favour those selling such homes as tenanted investments rather than servicing notice to the tenant and selling them as vacant properties.
He (left) said, “The problem for the landlord is how to achieve the best sale price without losing too much rental income. Most estate agents tell their letting clients to decant their tenants before instructing them to sell the property. But that approach comes with some major disadvantages. Not only do landlords stop receiving rent but the property often looks unkempt and might need redecoration. The process is invariably long and sometimes tortuous and will require the landlord to find monthly mortgage repayments from other sources for up to six months or more.
“By contrast, an auctioneer will recommend that landlords sell with tenants remaining in place and the properties offered as tenanted investments. This has the prime advantage of the landlord continuing to receive rent while the sale is taking place. The property also usually presents better when occupied – and invariably the tenants will want to stay put rather than be forced out. It’s a win-win for both parties.”
Auction House reported on its April sales, with 290 lots sold from 402 offered (a success rate of 72%) raising a £44.5m. The four-month performance in 2016 improved further, with sales going past the 1,000 lots milestone one month earlier than in 2015. The January-April total stands at 1,027 lots sold from 1,241 offered, with an average success rate of 76.6% and a total sales value of £137.5m.
He added, “Demand for residential investments hasn’t dropped away as many pundits suggested. Indeed, we have seen a strong start to 2016 with most of our sales rooms showing growth over last year’s excellent performance. There was some seller hesitancy immediately following the introduction of the Stamp Duty surcharge but this is now behind us and entries are strengthening. Most believe that the outcome of the Brexit vote will have little short term effect on the auctions market. Normality is returning to the supply side in our sector and buyer demand is still healthy. I expect activity to increase further during the summer and autumn.
“As far as buy-to-let is concerned, there are still numerous cash-rich buyers who see rental property as a highly valued part of their investment programme. It’s one that has consistently delivered in the past and should continue to do so in the future.”