Investment / Vacant
The proportion of vacant properties Allsop offered at auction in 2015 was roughly consistent with the year before, with the 790 sold representing 57% of the total number of lots on offer (895 / 58% in 2014) and maintaining the firm’s wide range of stock for those looking for development and investment opportunities. Income producing lots saw an increase to 39% from 37% the year prior (stable at 592 from 599 in 2014). There was a fall in the number of part vacant lots, with 55 sold in 2015 compared with 2014’s 73 (down from 5% to 4%).
Commercial / Residential
The average lot size of residential sales in 2015 was £310,000, a 14% increase on 2014 (£271,000).
Residential properties experienced a decrease in sales numbers, declining 9% from 1,302 in 2014 to 1,182 in 2015 – making up nearly all of the decrease in overall lot sales.
Sales of commercial and mixed-use properties stayed relatively stable, with a negligible decrease in the number of commercial properties with potential for residential use sold and a slight rise in the number of mixed-use properties sold. Coming off the back of 2014’s sharp increase in the number of commercial sales, this stability reflects continued demand for the value opportunities offered by the extension of permitted development rights (PDR) which allow for commercial buildings to be converted for residential use without planning consent.
The total value of commercial buildings sold in residential auctions rose sharply, raising £69m (average lot size £592,000) up from £30m in 2014 (average lot size £226,000). While the volume of commercial buildings sold in residential auctions fell in 2015, the huge rise in revenue demonstrates the strong demand for PDR opportunities, highlighting the high potential uplift in value anticipated by investors.
Regional Distribution of Properties Sold in 2015
The average lot size within the M25 region increased for another year, running to £532,000 from £486,000, up 9.5% (down on 2014’s increase of 22%) reflecting the general softening in the rate of house price increases.
The number of lots selling for more than £1m went up. 90 lots realised a total of £193m, compared with 78 sold in 2014 for a total of £157m.
There was a slight decline in the proportion of lots from the South East (including London) returning to the 2013 level of 53%, down from 2014’s 57%. The proportions from the regions remained roughly the same save for an increase in lots sold in the North West from 7% to 12% of all lots sold.
Average Price Achieved for Vacant Single Units (Houses & Flats)
The general trend seen this year has been modest growth in average unit prices across the board, with two notable exceptions in the North West and the South West. Both saw substantial increases of 83% and 29% respectively, up from 34% and a decrease of 2% respectively in 2014.
This general trend of steady growth reflects the wider UK market. Figures from the Nationwide Building Society* show an annual slowdown in growth nationally – down 4.5% year-on-year from 8.3% at the end of 2014 – but a modest increase on a monthly basis, up to 4.5% in December from 3.7% in November.
[NB. Our auction results show a modest drop in the average price of single vacant units last year in Yorkshire & The Humber. We attribute this only to the nature of the stock offered and not to any trend.]
* Source: Nationwide House Price Index December 2015