Tenanted properties prove tough to sell at auction as...

Richard Worrall, the NAVA Propertymark President, writes:

Having been in having been involved in the sale of properties for nearly 38 years I have seen my fair share of predictions and have always shied away from giving my own.

However if you ask people to give their opinion then the chances are one of them may well be correct. So here are my thoughts on 2024.

Let’s start with what we know has happened over the last 12 months.

2023 proved to be a very challenging time with continued interest rate rises which have only recently just begun to flatten and a number of sellers being forced to realise that in order to achieve a sale on their property within a reasonable time frame, they would be selling at a figure significantly less than during the heady post Covid boom that the property market experienced.

This has given rise to significantly larger catalogues for all the main auction houses although this has not translated into a significantly larger number of properties being sold at auction.

Indeed, the number of properties withdrawn prior to auction or unsold on the day of the auction, has been higher than previously seen in the market.

Interestingly, there has also been a significant rise in a number of people buying at auction in order to live in the property themselves rather than what is considered to be the traditional type of auction purchaser.

Without doubt the type of property that has proven more difficult to sell than any other during the last 12 months has been tenanted flats, due to the lower number of investor landlords who are in the market for these types of investments at the moment.

Based on this, I would expect more of the same for 2024.

There are still many people who are yet to come off their competitive fixed rate mortgages, and for some, the significant rise in their monthly repayments when they do so, will prove extremely challenging, and they will be looking to exit the market quickly.

I would anticipate that interest rates will stay at current levels as the government has not yet achieved its target inflation figure and has stated repeatedly that they will use increased interest rates to reduce inflation.

Being an investor landlord has lost its appeal to many over the last 12 months and the reduced number of buyers will continue to squeeze pricing in this sector.

There will, most likely, be a general election in 2024 - how this affects purchasers’ appetite to buy, only time will tell.

The one thing we have no control over is the confidence that the public has in the market at any given moment in time, and of course, confidence is the key to a strong market.

Whatever happens in the market, one thing will not change: the speed and certainty that sale at auction gives clients.

Auctioneers have been successfully selling since 500 BC and will still be selling successfully for their clients in 2024…..