Posts tagged: property auction
If you’re desperate to get out of the rental game and onto the property ladder, there could be a way to save at least 25% on the house price in the process. Rising numbers of local authority houses and flats are being released onto the market in metropolitan areas and many can cost at least 25% less than comparable properties in the same areas.
However, it’s important to know exactly why these properties are so greatly reduced in price. There are often notable differences in the nature of ownership of the property and these financial aspects need to be taken into account.
David Kempster, a directory of property search company SearchFlow, says “If you buy a local authority house, the chances are you will do so as a freeholder. But in the case of the flats, the council tends to retain the freehold so you can only buy on leasehold.
“This is a vital distinction, because leaseholders are liable to pay not only a service charge, but potentially maintenance costs too. The legal principle of ‘caveat emptor’ or buyer beware means owners have no come-back if they unwittingly take on liabilities when purchasing a leasehold.
“For this reason, it’s important to check exactly what the service charge covers and if possible, to see previous bills. It’s also essential to check for scheduled maintenance as service charges don’t cover major maintenance and renovation work. In some cases, leaseholders can become liable for as much as £60,000 to put toward lift and roof repairs.”
If you’re going to consider one of these ex-authority properties you might also need to consider the proportion of private ownership on the street or estate. If there are other like-minded people who have bought into ex-council properties you might be welcomed a little better than if you were the only non-tenant living on the block. There is also a chance that prices on these properties might rise quite quickly.
Richard Sexton, a director of e.surv chartered surveyors said “Historically, these properties have generated less demand than equivalent private sector stock, though as private ownership increases in a given development this effect lessens. Buyers need to consider long term prospects; one day they are going to want to move up the property ladder.
“Make sure your legal adviser investigates the property fully and takes account of any communal costs. There may be clauses which require significant contributions to parts that may not even affect your flat.”
The good news is that most local authorities will ensure potential buyers have all the facts before they buy any ex-council property. In the case of shared areas there could be communal repairs required and maintenance bills to pay. All potential buyers should be given an assignment pack from the council in question detailing any works that are required to the building.
Surprisingly, some local authorities actually resent private ownership of ex-authority property and may be less than happy to help obstructing your path and failing to give you all the information you need. If you are dead set on buying an ex-council house though there is some detective work you can do.
Nicholas Ayre, a director of buying agents Home Fusion, explained: “Find out if the building or estate has a residents’ association and, if so, to get in touch.
“They might be able to provide you with a copy of their minutes from a recent meeting or talk to you about any maintenance and repair issues they are currently trying to resolve.”
When considering ex-council property it’s pertinent to ask the local authority the same questions you would ask of a private seller. Ask about council tax, how safe the area is, where local amenities are situated etc.
As long as you ensure you get all the facts, ex-council property could be the answer for young people looking to buy their first home for less.
St Giles Hospital in Camberwell is set to be sold by NHS Southwark. With its imposing turrets, wrought iron gates and clock tower you would be forgiven for thinking this Georgian hospital was way outside the budget of your average house-hunter. Whilst the price has not been announced yet, this Grade II listed building is set to be one of the bargain historic buildings on offer as part of a country-wide ‘sell-off’ by local councils.
Conisbrough Priory near Dorchester, the public swimming baths in Rotherham, and two large Georgian terraces in Greenwich are also amongst the buildings that will be on sale. Property investment experts said shrewd house-hunters could snap up a real bargain as a result of the ‘Big Council Sell Off’.
Let’s take a look at those prices then. Doncaster Council has given Conisbrough Priory a guide price of £275,000 whilst the swimming baths in Rotherham are up for a measly £150,000. Lluesty Hospital in Wales was sold at auction earlier this year for £275,000. The classical hospital building, which comes complete with a parapet and its own court yard, was snapped up by a group of property developers with huge plans to build 70 houses within the grounds.
According to auction houses based in London and Yorkshire, over 100 properties have been put up for sale recently by a number of councils. And it’s not just local authorities that are getting in on the action. Central Government is having a stab at reducing its estate with sales hitting £115 million in the past nine months alone. These sales have included buildings such as Lincoln’s Inn Fiends in London, the former home of the Land Registry offices.
However, before you get out your chequebook and pen it does of course pay to do your research. Property experts have warned that many of the public buildings on sale could be too dilapidated or large for the novice property developer to take on.
If it’s holiday properties you’re after then maybe you’d like to consider a cottage situated next to the Tate in picturesque and sought-after St Ives in Cornwall. This will set you back a paltry £150,000.
Investment analysts at Stock Market Review are doling out a lot of encouragement to house and property hunters advising them to keep an eye on the list of buildings that are put up for sale each month. A post on their website read “People who want to renovate a former public building into a modern residential home could scoop a bargain if what they want does not sell well in the auction room”.
If you are thinking of buying a property at auction it’s a great time to do so. There are a huge amount of opportunities on the market right now and more and more people are turning to auctions in order to sell a property quickly or snap up a bargain. The slow market and increasing number of houses being repossessed has resulted in a dramatic surge in auction sales and it’s good know the advantages as well as the risks involved with buying a property this way.
Where to Look
You can find out about local and national auctions through estate agents, newspapers, and our online property auctions directory. Many auctions are also advertised by the roadside so look out for signs advertising local auctions. If you are buying in a new area it is a good idea to do some research before you decide which auctions to attend. There is plenty of information online that can assist you so that you don’t make any hasty decisions.
On the Day of Auction
Before you head off to the auction house, it’s a good idea to call up to make sure any property you are interested in bidding on has not already been sold or has been withdrawn. You should also ensure you have your deposit to hand – many auction houses accept cash or cheques, but it’s best to check beforehand. You will normally need 2 forms of identification in order to register.
Once you have been issued with your bidding number you’re ready to get started. If you are interested in a particular lot it’s important to stay calm once bidding commences. You should already have a maximum price that you are prepared to pay for the property and make sure you stick to this figure. Many people get carried away by the bidding process and have bid well over the odds as a result. It’s a good idea to gauge interest in the property before you start bidding yourself.
All lots up for auction will have a reserve price which is the minimum price the sells is prepared to accept on a property. This figure is not disclosed, but if bidding doesn’t reach this figure the property owner may well decide not to sell on the day for anything less. However, the guide price (that is the price the property is expected to sell for) should give you a rough idea of what the reserve price may be and hopefully this figure is in line with what you are prepared to pay. Otherwise you may be in for some touch negotiations with the buyer or lose out on the property completely.
Tips for Bidding at Auction
Buying or selling a property at auction has a host of benefits and is becoming more and more popular across the UK. As long as you stick to the golden rules below you should find the process enjoyable and very rewarding.
- Always research the property you are interested in fully
- Make sure you have your finances in order and the required deposit (usually 10%)
- Get to the auction house early to register and take stock of the environment
- When bidding commences, don’t get carried away – remember your budget!
- Bidding can be intimidating so try to stay calm and focused
More information on property auctions in the UK can be found in the resources section on The Big Property
Ever since the property industry made its first bold steps online, the possibilities offered have been a gift for sellers and buyers alike. From basic search to widgets, from Google Maps integration to social media engagement, pioneers in the property world have seized upon digital developments to reap the benefits of their “revolutionary” vision. But how much of this has truly been revolutionary?
Every so often, we’re promised a real game-changer, but in almost all cases the changes are superficial and the game seems to stay the same. Recently, there’s been a lot of excitement over both Google and Tesco venturing into the industry. Again, we were led to believe this would herald a new era in online property sales. Again, we were disappointed.
For as long as the big players in the property world (old and new) invest their time and money into window dressing, we will always fail to address the issues that really need our attention: significantly reducing the stress and hassle people experience when buying a home, making the whole process quicker and easier, restoring trust in estate agents, dragging intimidating property auctions into the 21st century, and ending gazumping forever.
These issues cut to the heart of what matters to buyers. They should also make us question how we, as an industry, use the Internet not to simply promote properties but also to close the deal.
This is what I had in mind when I created Click to Purchase – a transactional platform that enables people to buy property online at the click of a button or via real-time auction. There’s no excessive haggling or negotiating. No recurrent visits to the agent’s office. No back room deals after an offer has been placed. As soon as a bid is accepted, the contract is immediately exchanged online. It’s like e-commerce for property.
I’ve lost count of the number of times I was told “no-one will ever buy property online”. But the platform has already been active in the commercial market for several months. During this time, it has generated sales in excess of £15 million and thrived despite the financial squeeze. There is obviously a hunger for this kind of innovation from buyers and I’m now hoping for this success to be shared across the residential market.
Very soon, all estate agents across the UK will have the option to invite their customers to buy via Click to Purchase. Now, I believe this really is something special. A game-changer. Dare I say, revolutionary?
Author Biography: Neil Singer
Neil Singer has worked in the commercial property industry for over 25 years. In recent years he has been inspired by the power of the Internet and its use in business. His passion for applying new technologies to traditional processes led him to create the Click to Purchase platform. Please visit the Click to Purchase website (http://clicktopurchase.com) and follow him on Twitter.