Welcome to our 1st Sale of 2024
Welcome to our first auction of 2024 and a year that I believe will offer some fantastic opportunities for auction buyers. Before we look at the reasons why I have come to this conclusion, now is a good time to briefly reflect on 2023.
Last year was a challenge for a variety of reasons. We came out of the post Covid era and the cost of that time had to start to be repaid in some way. Tax remained high and for some increased and, most significantly, the cost of borrowing increased enormously compared to the months before, during and after Covid. We had all got used to ultra-low borrowing costs but, when reflecting on this aspect through history, even at the peak rates towards the end of 2023, the cost of borrowing was still at a very low level, it was not many years ago we were at double digit interest rates. I guess in reality we can go back to the Liz Truss mini budget in September 2022 which in many respects triggered the challenges in 2023.
Despite this our auction rooms remained busy. Some sellers were squeezed by borrowing costs which was a driving force behind their desire to sell whilst buyers remained very active, adjusted quickly to the cost of borrowing and took advantage in the growth of rents obtainable, some of these growth rates never seen before.
It is therefore a testament to our tenacity, unique market data from over 1,200 Estate Agency branches within our group that we were ideally positioned to advise clients and, our sales value compared to 2022 grew to over £312 Million in capital value of sales whilst lots offered and sold grew at the fastest level ever.
There will be a lot of market data being published over the coming weeks but I am left to wonder how much of this can be relied upon. Over Covid the auction industry adapted very quickly as all sales had to go online. Since then, the vast majority of auctioneers have opted to maintain this model, unlike ourselves, with a return to an auction venue. Also, when registering to bid with most auctioneers, and again, unlike ourselves, bidders have to state the lot they wish to bid for. What has therefore happened is that if an auctioneer has no registered bidders on any lots in their sale, they simply withdraw that lot and artificially massage their overall success rate.
We have also seen a surge in auctioneers “buying in“ lots. This is where they don’t have a bid at or above the reserve and simply run up the bidding and buy the property in. So, what does this mean? Many results and data are not a true reflection of the sale, when using this data for comparable evidence it is unreliable and in my opinion, a great shame that the transparent playing field has been massively skewed. In our sales whether bidding online or in the auction room itself, you can bid on any, or as many lots as you like, we don’t know who has registered for which lots so, every lot is offered regardless. I’ll leave it to you to decide what is, and what is not, fake news!
So let’s look forward. 2024 has started with lenders fighting each other for business and we are seeing borrowing costs fall on a weekly basis. Inflation has fallen dramatically and this gives the headroom for the Bank of England to reduce rates which, lenders are under significant pressure to pass on to you, their customers. Finally its an election year and whilst I will not start a political debate in this forum, we know that every party wants your vote and any incumbent government usually does all they can with taxation and other financial benefits to try and persuade you to keep them in power – all good for consumers and all good for property buyers!
For some 35 years at Barnard Marcus I have seen many elections and I always hear one phrase “we’re going to wait until after the election“. Historically nothing happens immediately following any election that creates an environment that is better for buyers. So my suggestion is this, go through this catalogue, find stock to bid for and go for it now before interest rates fall still further and other factors persuade those currently sat on the fence to engage.
I hope you enjoy this catalogue, we are here to help in the lead up to the sale and look forward to seeing you at The Grand Connaught Rooms on Tuesday 6th February, we wish you the best of luck with your bidding.
