4th December 2018
Christmas is a time when the property market comes to a rest. There is a lag period when both the rental and sales market stagnate.
People go into a different zone. There are multiple invites to Christmas parties. This is when deals slow down, valuers, solicitors and mortgage brokers start to wind down, all affecting how quickly you can get a deal through.
This is the environment in which the astute investor needs to be purchasing.
In this backdrop, auctions are a good platform to pick up deals from. The closer to Christmas the better your chances to pick up a deal.
A few years ago, we found ourselves on the wrong side of the auction room in such an environment. This was during the Olympic Games in 2012, which was also compounded by the Queen’s Jubilee. The population was busy feasting and drinking. There was only a skeleton attendance in the auction rooms.
Lots had to be sold, but the public wasn’t coming in.
Auctions are used by sellers who want the security of a sale. An offer, and putting it in the hands of lawyers, is not the same. You could do this multiple times and still not have the security of a confirmed sale. Instead, just a large legal bill.
Auctions provide certainty. Hence, we put two lots in the auction. One large property in Shepherd’s Bush consisting of three flats, and the other a freehold building in Harlesden; both great deals for the buyer. We left plenty of meat on the bone for the incoming purchaser. We are considerate that way.
Our angle was, we had exchanged on the properties but not completed. The completion was set six months away or earlier at our discretion.
Therefore, the aim was a quick in and out, without even so much as a clean up.
Both were great deals, as evidenced by the eventual sale price.
We did not foresee the effect of the Olympics having on the auction room. When people drink and watch games, they are in no mood to focus on getting deals done, the next day the edge is gone. You will have a similar effect leading up to Christmas.
For the shrewd sober investor, this is exactly the time to exploit the situation.
There are auctions on the 12th, 13th and 17th of December 2018, by Auction House, Allsops, and Barnard Marcus being the last one of the year.
These are all sizable auction houses, and therefore will have good stock to sell. The key is to ensure all the homework is done well in advance.
This is a risk, as homework costs money, and you may need to kiss a few frogs before you get to something which stacks up. Therefore, it is essential all the commercial due diligence is done prior to having the solicitor check the legals, as his/her clock will be ticking.
This time round, you have the Christmas effect compounded by the uncertainty caused by Brexit.
A rare combination of events, and a perfect time to exploit the market. Do get in touch for further information.