The Chancellor is rumoured to confirm the extension in next week’s Budget, and Parker is preparing for an increase in both lots and bids at monthly national property auctions.
He says there’s already been a significant increase in auction activity as buyers can complete their property purchase right up until 28 days before the deadline if they buy through an auction.
“When you buy a property in an auction, you have a fixed completion date from the outset,” he comments. “Once the hammer falls contracts are exchanged and the completion date is legally set. This is typically 20 working days following the date of the auction – unless otherwise specified in the legal pack. So, with accommodating weekends, purchases could be completed in just 28 days.”
“The average property purchase on the open market is taking more than 100 days, which means if the deadline is extended, the buying process needs to realistically start in the next week or so. Many buyers will be unlikely to complete and will be left disappointed if they see the news and think they now have plenty of time.”
“From now until the new proposed deadline, auctions is the only method to ensure completion without having to pay stamp duty.”
The stamp duty holiday was introduced in July last year, as a result of the first Covid-19 lockdown. Chancellor Rishi Sunak temporarily increased the threshold to £500,000 for most property purchases in England and Northern Ireland until March 31 2021, which is now likely to be extended until the end of June. This is to provide support to buyers who took a financial hit because of the pandemic, to help them complete their purchase and give the property market a boost.
Parker goes on to say even if you still have a property to sell, there is still time as demand for property at auctions is at an all-time high.
“Stamp duty is driving purchases through auctions – for our live-streamed national property auction in January we had 2,000 registered bidders, a record high – and 69% more than our previous peak in June 2020,” he adds.
“There is a real appetite for people buying properties at auction, driven by the speed of completion, and that demand means sellers can achieve a sale price that may be beyond their expectations. More estate agents are partnering with us to sell via auction too, in order to remove withdrawals and fall throughs. It de-risks the process for sellers as they capitalise on the momentum the stamp duty holiday has brought to the market.”
Parker concludes: “As we prepare for our next auctions, we are expecting equally high numbers as people buy to beat the stamp duty deadline.”
Strettons raises £11.7 million at February sale
Strettons’ 2021 auction calendar is off to a strong start, with the company raising £11.7 million and selling 83% of the properties offered in its February sale.
The highest price of the day was achieved for lot 1, a terrace of four Grade II listed properties on the historic Cable Street in East London. Sold by order of Newlon Housing Trust, the property achieved £3.215 million against a guide price of £2.4 million-plus following very competitive bidding.
There was also strong bidding for another Grade II listed property in the sale, Soothill Manor and Soothill Lodge in Batley, West Yorkshire. The extensive 19th century property was sold for £846,000 against a guide of £550,000 plus. A third Grade II listed property, a vacant house in Whitechapel E1, sold for £806,000 against a guide of £750,000.
Commercial lots were also popular. A freehold investment on Hoe Street, Walthamstow, E17, producing £21,500 per annum sold for £615,000 against a guide price of £280,000. Meanwhile, a freehold commercial investment in Grays, producing £32,500 per annum sold for £475,000 off a guide of £400,000.
As with previous Strettons sales, a series of land sites sold on behalf of advertising agency JC Decaux. All but one of the sites sold with prices ranging from £31,000 to £57,500.
Andrew Brown, auction director at Strettons, comments: “It was certainly a positive start to the sale given the success of lot 1. We sold four similar properties on Cable Street in 2020 which also sold above guide, so I expected this property to be popular, but it was great to achieve over £3 million for our client.”
“Overall, I think the market is holding up well and our results show that sensibly priced properties will continue to find favour with buyers.”
Strettons sold £74.8 million worth of property in 2020 and is looking to improve on this total in 2021. Lots are invited for the firm’s next sale which takes place on Thursday April 8 2021. The auction will be live streamed with online, telephone and proxy bidding.
Sutton Kersh achieves highest ever sale at £13 million
Sutton Kersh sold £13 million worth of property at its first auction of 2021, making it the company’s most successful auction to date.
Some 40 properties (totalling £5 million) were sold prior to its February 18 auction and a further 80 were offered on the day – achieving a 90% success rate.
The first three lots offered sold for a considerable amount over their guide, with strong bidding wars from the offset.
Lot 1, a two-storey gated commercial space in Manchester, sold for an impressive £167,000 over the guide price.
The second lot in Liverpool L13, a double fronted detached property with two two-bedroom flats – both of which are currently let and producing £8,160 per annum – sold for £197,000 against a guide of £135,000.
There was a lengthy bidding war for lot 3, a mixed-use investment opportunity on the popular Rose Lane in Mossley Hill, L18. The property was listed with a guide price of £175,000 but sold for a huge £119,000 over this.
Cathy Holt, associate director of Sutton Kersh Auctions, says: “To sell over 100 lots worth over £13 million is a true testament to our team, demonstrating their ability to attract and secure the right vendors and buyers and offering the properties at the right prices.”
“I couldn’t be happier with how the sale went; there was a real buzz with plenty of bidding wars and I’m delighted that we achieved the company’s highest sales result to date, especially in these unprecedented times. We only have 12 properties left to sell post auction, again an extraordinary result.”
Over 500 people were registered to bid at the auction, which was viewed by hundreds across the UK. The auction had a vast selection of residential and investment properties that would make the ideal property project for a developer or a first-time buyer. These ‘doer-upper’ properties attracted multiple bidders, with many considerably exceeding their guide prices.
Lot 12, a three-bedroom residential property on Hilary Avenue in L14, had a guide of £90,000 and sold for £137,000. Meanwhile, lot 85, a three- or four-bedroom semi-detached property also in L14 in Dovecot, had great potential to extend. It sold for £144,000 against a guide of £80,000.
Sutton Kersh’s next auction will be taking place on April 8 2021.
<!– –> This post has originally been featured in Property Investor Today.