Commercial Auction Summer Review 2016
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Buyer analysis

Buyer analysis

Our regular buyers’ survey now in its fifth year and conducted at the point of exchange at the auction, has revealed that over the first six months of the year we have more regular buyers, slightly more local buyers and an increasing intention to finance against the purchase.

Have you bought a property at auction before?

Since the beginning of the year 82% of the buyers have bought at auction before, a similar figure seen over the last 2 years.

Do you intend to buy another commercial property at auction in the next 12 months?

With regards to buyers’ purchase intentions, 90% of our buyers stated a desire to buy again at auction within the next 12 months, a slight decrease on 2015 levels (95%).

Do you intend to use finance?

The number of buyers intending to finance has remained reasonably flat with a slight increase to 34% from 32% in 2015. The secondary market is still clearly driven with 66% of buyers purchasing without relying on finance.

How far are you located from the property you have purchased?

Similar to 2015, the greater percentage of buyers came from regions outside the locality of the property; this is not surprising as the general investment climate has improved over recent years and the search for improved yields has driven investors further afield.

How much do you intend to invest?

Changes in taxation, both SDLT and reduction of tax relief on buy-to-let has increased the number of buyers in the £250k – £1m bracket, as some investors switch from residential to commercial. This percentage increase results in an anomaly in that it appears the number of investors with £1m+ to invest has fallen. This does not appear to be the case, rather as mentioned, a rise in number of buyers of small to medium sized lots.