Savills plc
Savills plc
03/31/2021 | Press release | Distributed by Public on 03/31/2021 02:04
Key themes for residential auctions in 2021
As the hammer went down on our final sale of 2020 it sealed a year and a performance that surprised us all.
With the onset of the first lockdown, the prospect of raising significantly more than the previous year seemed almost unthinkable. But as the months ticked by, we began to feel it could actually be within reach. Not only did we hold our biggest December sale since 2015, we also raised 30 per cent more than our concluding auction of 2019.
That momentum is continuing. For the first time in a while, there's a genuine demand across all asset classes as well as a cross section of active buyers. The key takeaway is that all are looking to transact on good quality property, be that in terms of location, build type, the investment opportunity or potential yield.
Back in 2016 we saw the impact that the 3 per cent surcharge for additional homes had in the auction room; that February we had a bumper sale with nearly 200 lots sold and around £70 million raised. It was clear that the stamp duty holiday would have a similar effect; a buyer and seller survey undertaken by our residential research team in December reported that 25 per cent of respondents were seeking to beat the deadline, a sentiment echoed by many of our clients too.
A remote method of sale offers flexibility meaning we had the opportunity to meet this demand by holding two spring sales. The fact that we registered more bidders in February than ever before, coupled with around 200 lots being sold for around £80 million across both auctions highlights just how much of a driver the deadline was for buyers.
Given that the stamp duty holiday has been extended, we've adjusted upcoming auction dates to accommodate several additional sales and already the signs are encouraging. So what are the major areas of interest?
Residential
Recent Savills research has identified a marked shortage of detached houses for sale across east and southern England, so it's no coincidence that they generate significant interest when they come up at auction.
For example, in March we sold a five bedroom farmhouse with attached cottage in Devon for £1.7 million - a great illustration of the lifestyle property currently sought by owner occupiers.
Developers and investors are also attracted by what they consider to be a reliable asset. When it comes to flats, size, location, condition and outside space are all aspects that have strong sales appeal.
Development
Development sites represent an asset class which has really picked up pace due to the rarity of finding a suitable and well-located offering. Several sites in London and other key regional cities such as Cardiff have sold well this year and, with a great many self-builders and locally based builders out there, we'd expect demand to continue.
Mixed use
Towards the latter part of 2020 and through into this year, we've had some stand-out mixed-use assets and alternative-use class properties which have commanded strong results.
We saw that in March when a Notting Hill mixed-use commercial and residential opportunity went for 25 per cent more than its £950,000 guide, while towards the end of last year a 50-room Birmingham care home with residential potential had a hammer price of £1.445 million. Ultimately where there are multiple angles to maximise rental income or develop further, these opportunities are being well received by the market.
It's often said our trading floor - the residential auction - is regarded as the front line of housing market activity so eyes will be on our upcoming sale on 14 April. Of course, we expect to come up against challenges in the months to come but, after the winter lockdown, some good weather, the easing of restrictions and the vaccination rollout could result in a considerable boost.
Further information
Register to bid or view preliminary lots at Savills property auction on Wednesday 14 April here