Residential Auction Annual Review 2014
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Property Analysis

Investment / Vacant

In 2014, vacant properties represented 58% of the total number of lots offered under the hammer by Allsop (48% in 2013). Pure investment stock fell from 41% to 37%. Those owner occupiers, investors and developers looking for vacant opportunities have been able to search across a wide selection of properties. Higher prices driven by keener competition between different buyer classes have in turn encouraged owners to sell.

Commercial / Residential

The average lot size of residential sales in 2014 was £270,785, a 25% increase on 2013 (£216,300).

In particular, there has been a marked increase in the number of commercial properties with potential for residential use – 133 (8.6% of all lots sold) in 2014, up from 72 (4.6%) in 2013. Sellers have been keen to realise value opportunities enabled by, for example, permitted development rights. Although the number of deals done in this sector has increased, the total value of those deals has not risen proportionately. In all, £30m was raised (average lot size £226,000) up from £27m in 2013 (average lot size £375,000).

Regional Distribution of Properties Sold in 2014

The proportion of lots sold within the M25 rose to 40% of the total last year (35% in 2013). The average lot size in this region rose from £381,000 to £486,000, an increase of 22%. We attribute this to the strengthening demand for central London stock, the ripple effect of the price rises that have resulted from this trend and the consequent confidence of sellers to release larger value lots to the market at auction. In 2013, 54 lots raised £1m or more realising a total of £90m. 2014 saw a total of 78 lots sell for £1m or more for a total of £157m (up 73% by value).

The South East (including London) accounted for 57% of the total stock offered at our sales in 2014 (53% in 2013). In all other respects the relative distribution of lots across the regions of the UK remains broadly similar to the previous year.

Average Price Achieved for Vacant Single Units (Houses & Flats)

Our experience has been broadly consistent with movements in house prices generally in 2014.

According to the Nationwide Building Society*, although the pace of annual house price growth in the UK continued to soften towards the end of the year, slowing from 8.5% in November to 7.2% in December, all regions experienced growth in 2014 ranging from 2% in Wales to 10% in the outer South East (non M25) and 17.8% in central London.

[NB. Our auction results show a small drop in the average price of single vacant units last year in the South East (excluding the M25). We attribute this only to the nature of the stock offered and not to any trend.]

* Source: Nationwide House Price Index December 2014