New auction trend: buyers purchasing lots prior to auction

Some 52% of lots offered under the hammer at Network Auctions’ latest sale sold prior to auction.

The results from its June 6 auction show buyers are using a different buying tactic: purchasing before sale.

“Buyers are keen to make good property purchases and we are seeing this increasingly with strong offers being made before auction,” Toby Limbrick, director of Network Auctions, commented.

“The uncertainty surrounding Brexit has lifted a little and we’ve been much busier in terms of viewings and response – and that has converted to positive sales.”

He added that sellers are more responsive to before-auction offers, especially when they are above reserve, which shows the buyer understands the market.

“Auctions create a momentum to the sales process which is lacking in private treaty, plus you have the certainty of sale – something which every buyer and seller wants more and more,” Limbrick said.

However, despite the rise in buyers purchasing before auction, the latest ballroom sale still attracted keen bidding. Highlights included a two-bedroom cottage in Bedfordshire in need of repair selling for £164,000 against a guide price of £110,000-plus, a residential investment of six flats in Wembley selling for £725,000, and a two-bedroom maisonette in Aylesbury selling at £123,000 against a guide of £95,000.

Limbrick continued: “Auction gets properties sold; we recently sold a property which had been on the market and had a sale progressing at £139,000. The buyer was procrastinating and so the seller decided to enter it to auction to get closure.”

“We guided it at £110,000-plus and after 50 viewings and 29 legal packs downloaded, we sold it for £164,000 after a bidding war including the previous buyer. That’s the result of auction – auction forces people into action.”

Network Auctions raised a total of £8,616,500 and achieved a success rate of 78%. Its next ballroom sale is Thursday 25 July at The Westbury Hotel, Mayfair.