More BTL landlords acquiring property at auction
It would seem that a growing number of landlords are starting to recognise that auctions are a potentially great way to acquire property competitively, with a wide range of bargains often going under the hammer.
One of the UK’s largest property firms, Auction House, reports that there has been a significant rise in the volume of buy-to-let landlords acquiring homes at auction of late, as more buyers recognise that auctions are no longer seen as the domain of hard-nosed property investors and developers.
Auction House Founding Director Roger Lake (pictured) says that an increasing number of landlords are turning to auctions to acquire property to avoid the conventional drawn out process of property buying via the private treaty.
He argues that landlords are better off selling their buy-to-let properties as tenanted investments rather than servicing notice to the tenant and selling them as vacant properties.
He explained: “The problem for the landlord is how to achieve the best sale price without losing too much rental income. Most agents tell their letting clients to decant their tenants before instructing them to sell the property. But that approach comes with major disadvantages. Not only do landlords stop receiving rent but the property often looks unkempt. The process is long and sometimes tortuous and will require the landlord to find monthly mortgage repayments from other sources for up to six months.
“By contrast, an auctioneer will recommend that landlords sell with tenants remaining in place and the properties offered as tenanted investments. This has the prime advantage of the landlord continuing to receive rent while the sale is taking place. The property also usually presents better when occupied - and invariably the tenants will want to stay put rather than be forced out. It’s a win-win for both parties.”
Lake’s comments come as the company’s latest figures show that Auction House has seen a strong start to 2016 with most of their sales rooms showing growth over last year’s performance.
The January-April total stands at 1,027 lots sold from 1,241 offered, with an average success rate of 76.6% and a total sales value of £137.5m.
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