Bargain hunters expected at mass auction

AUCTIONS:The guide prices in an upcoming UK property auction make for tantalising reading, writes EDEL MORGAN

THE UK property market may be deep in the doldrums but in every bad downturn with house repossessions rife – or “distressed lots” as they’re referred to by UK estate agent Allsop – there’s a silver lining for some investor looking for a bargain regardless of how it came to the marketplace.

Allsop is known for its auctions of “troubled” property. In its forthcoming auction on February 17th to 19th there are less properties being auctioned on behalf of banks, building societies and receivers than in the last quarter of 2008. But repossessions still account for just over half of the 490 lots.

Auctioneer and partner at Allsop, Gary Murphy, says this is not to say there are fewer repossessions happening “but it could be down to more strategic planning on the part of the banks, where they are taking a step back for the moment”.

For those who can bear to overlook the often tragic history of the properties going under the hammer, the guide prices make for tantalising reading. Lot 16, for example, is three adjoining mid-terrace buildings at 122-126 Lewisham Way, New Cross, London SE14 arranged into seven self-contained flats with a guide price of £600,000-£650,000 (€689,180- €746,432).

No details are given on Allsop’s online catalogue as to the state of the property but it’s unlikely it’s in walk-in condition.

It’s not a repossession but one of a number of lots being offloaded by housing associations around London.

According to Gary Murphy, housing association stock has to satisfy a decent home standard and often older ones that don’t comply are sold to raise money to inject capital into more modern stock.

Lot 17 is a terraced grade two listed five-storey building at 55 Kensington Court, close to High Street Kensington tube station, with a guide of £1.1 million to £1.25 million (€1.263 million to €1.435 million).

The property is arranged as 20 “letting rooms” and a caretaker’s unit.

While this seems a good price for a period property in prime Kensington, Murphy says he can’t comment on the condition of any of the individual properties listed because he hasn’t seen them. The current rent is £72,124 (€82,802) per annum with vacant possession of four rooms.

The current dip in sterling relative to the euro may make these properties an even more attractive prospect for Irish investors, but Murphy says he “can’t be specific” on whether they’ve had much feedback from Irish buyers, saying it’s not something they record.

Another period property at 90 Evelyn Street, Deptford, is three storeys and has two self-contained maisonettes and a rear garden.

It has a guide price of £225,000-£250,000 (€258,300- €287,000).

While in Brockley Rise SE23, lot 25 is Survey House, a detached building arranged into self-contained ground floor office accommodation and a first floor flat with a guide of £280,000-£320,000 (€321,300-€367,500).

Allsop says that despite the drought of mortgage finance and the consequent stagnation in the private treaty homes market, auctions remain “a very active forum” for transactional business.

“Everybody at auction is hoping to buy a bargain,” says Murphy, who adds that the private treaty market “sometimes reflects the expectation of the seller. At auction they have to be priced realistically or it’s a waste of everyone’s time.”

That’s not to say everything is ultimately going to sell at the guide price, which often acts as a lure to the auction room. “The guide is usually more an indication of the vendor’s minimum expectation. On average we find that they go for 10 per cent above.”