Auction watch: February 2021.
February may be the shortest month of the year, but there was no shortage of properties available (and sold) at auction last month, which we’re attributing to the potential looming Stamp Duty holiday cut-off date.
Thanks to auctions’ typical 28-day completion window, most of the properties sold at auction in February will change hands before the March 31st deadline – saving the winning bidders an often significant sum of money.
We took a look through the extensive listings and picked out a few of our favourites for you here:
The imposing project
Offered for sale by executors in South Wales was this large period semi that has seen far better days.
Homes in top condition on Westbourne Road, on Cardiff’s southern skirts, can reach as high as £700,000 – but number 21 is a long way from being in such fine fettle. Archive images on Google Earth show it’s been uninhabitable for around 10 years, with some of the frontage having been removed (presumably for structural repair).
That alone might typically make it difficult to secure finance on, but there’s more. Inspecting the Legal Pack (always recommended when buying at auction) revealed that the leasehold is unregistered and has just 39 years left on it.
Registration of leaseholds has been compulsory since the 1980s but properties that haven’t been sold since that time may remain unregistered. Chatting it through with a conveyancer, we were told that extending the leasehold and registering it with the Land Registry is, currently, a process that can take around 12 months. Some mortgage lenders will then insist on six months’ registered ownership before lending against it – meaning you could be 18 months from being able to refinance.
Their suggestion would be to investigate buying the freehold, which they estimated as typically taking eight weeks. We hope the winning bidder had done their homework, with them having paid a not-insignificant £363,000.
The cash buy
Northeast England is renowned for consistently offering some of the cheapest homes in Britain, and consequently none of the lots offered went unsold at Auction House North East’s livestreamed auction on 16th February – one flat in Washington sold for less than the price of a three-year-old Ford Focus.
This post-war semi, which sits on a large corner plot, was offered at a guide price of a mere £15,000. Had the winning bidder secured it at such a low price, they might have been forced into a cash purchase; mortgage lenders’ minimum loans are routinely double or even triple such an amount. But the winning bidder – who eventually paid £37,000 – might have faced difficulty borrowing anyway, as the house has no kitchen or bathroom and is therefore ‘unmortgageable’.
The previous owner had clearly started works on doing it up – the pictures show evidence of a rewire underway – but the new owner will still have to manage their budget tightly; the ceiling price in the street is under £70,000.
The (relative) bargain
This imposing Grade II-listed former brewery in picturesque Sherborne was converted in the 1990s and boasts five bedrooms, a large cellar and ample parking. On paper, it looks like it has the makings of a great family home.
It’d been on sale for a while, however, and was at one time marketed at £495,000 through a local agent. The price was subsequently dropped to offers over £400,000 with another agent, but still found no takers. The vendor appears to have turned to auction as a means of securing a sale, which an auction all-but guarantees, having perhaps become impatient or disillusioned with selling though the open market.
Whatever the reason, the winning bidder has good cause to be happy – they paid just £330,000.
The accessible investment
Looking at this listing in the guide, it has all the hallmarks of an unintimidating project for a novice investor. Three bedrooms, no complicated leasehold to worry about, with a good EPC rating and in need of only light-touch redecoration.
So it’s hardly surprising the £30,000 guide price was too good for bidders to resist, and it eventually sold for a still-affordable £77,000.
That good existing condition may make it harder to add value, but the winning bidder may instead look at renting the property out rather than selling it on. Converting the rear yard into off-road parking (with the suitable permissions, of course) may make the house even more appealing to tenants.
The diamond in the rough
If you see a property listed for an upcoming auction that you simply must have, this South London property is proof that you shouldn’t beat around the bush.
True wrecks are increasingly hard-to-find in the capital, but the potential to make profit means competition for them can be fierce. With planning permission for a loft conversion, dormer and extension, and a potential value topping seven figures (if next door is anything to go by), it’s no surprise that it sold prior to the auction.
That means we can’t say confidently what it sold for, but if the buyer got it for anywhere near its £600,000 guide price, they’ll have bought a bargain – although many of you may be wondering how a three-bed terrace in such neglected condition could ever be described that way.
There’s many months of work ahead and surely another six-figure sum spent to be spent, but this has the potential to be an incredible home.
The development opportunity
The pretty market town of a Sandbach has a lively local property market, which is why we were surprised to see this parcel of land, a little under a fifth of an acre in size, listed with such a low guide price – just £10,000.
Lying west of the town centre, Dee Close is conveniently placed for the local station, with hourly services to Manchester and Liverpool. Images in the listing show illustrations for the development of two bungalows in-keeping with other properties on the estate, but it’s apparent that – despite pre-planning advice having been taken – there’s no firm planning permission in place.
Land without planning permission can be difficult to secure finance for, and there’s no guarantee that planning will be granted; photos show the plot is currently home to two rights-of-way and a number of mature trees. This doesn’t mean planning permission will be automatically refused, but instead that it may be time-consuming and costly to acquire.
That said, properties on Dee Close sell for around £190,000, so it could be a very worthwhile investment – and it’s understandable why a brief bidding war delayed the end of the auction. When the scheduled time was over, the highest bid stood at £34,000; but online auctions typically only end when a period of 60 seconds passes without a bid. So the winning bidder – who ultimately paid £62,000 – will have been relieved to see it finally over the line.
The future TV star
Originally offered at a guide price of £400,000 before being withdrawn, this former water pumping station on the northern outskirts of Ipswich was advertised with hugely impressive CGI renderings of what a proposed conversion would look like.
Originally used by Anglian Water to serve houses across the local area, it was abandoned in the 1990s; however, it remains something of a local landmark and the planning application for the proposed conversion made the local news.
Showing a wraparound drive, stunning industrial details and orangery with roof terrace, the planning application was granted in mid-2020. We can only speculate why the vendor decided to list the property rather than begin works, but it’s possible that the overarching economic climate has impacted on their ability to access the necessary borrowing.
We’ll be keeping our eye out for this one making a return to the catalogue in the near future, and renewing our series link for Grand Designs…
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