In our Summer Review we said continuing low returns on cash, improved economic sentiment and the continued long-term appeal of property have all helped to create the best market conditions since 2007. This has been borne out by an overall sales total for 2014 of £524 million.
Since the summer we have conducted two auctions. Our October auction, held over two days, raised £124.8m reflecting a success rate of 84%. It was the largest property auction held in the UK for over seven years, with those properties having potential to add value and those let on long leases to good covenants attracting the greatest competition. The average overage above reserve (for all lots sold under the hammer) was 19%, a slight improvement on the 18% we saw in our four previous auctions this year.
Whilst marketing our December catalogue the Institute for Fiscal Studies suggested, a further £55bn of spending cuts would be required in 2015, over and above the £35bn proposed in the Chancellors Autumn Statement. In spite of this, confidence was maintained and £79.9m was raised, sustaining the success rate at 84%.
The auction room was business-like and well attended throughout the day with good demand evidenced by competitive bidding on the majority of the lots.
Despite the slight reduction in the average overage above reserve to 12%, the survey of buyers showed, year on year, a ‘sustained’ increase in the number of investors looking to continue buying in the New Year.
The sector remains attractive as an investment medium as evidenced by the remarkable results from 2014.