By Louise Fernley
As any seasoned property investor will tell you, the auction house can be a very dangerous place.
Caught up in the array of lots, the flurried pace of bidding and the chance of bagging a bargain, many property aficionados will confess that they have gotten carried away in the heat of the moment.
Take my father for instance, (no, seriously take him – is how the jokes goes I believe...) A frequenter of property auctions, in a recent phone conversation he told me excitedly: “I’ve bought a yard.”
“A yard?” I enquired.
“Well yes, a yard of garages, but I don’t like to call it a yard of garages.” Pausing for dramatic effect, he added: “I like to think of it as my muse.”
His muse? I became concerned that old age was catching up to him and soon he’d have to have a stern companion at these auctions to wrestle his hand down.
When I emailed to tell him this, he responded – not wholly unsurprisingly – rather crossly: “I’m not saying the yard is my muse,” he wrote out in capitals, “I’m calling it my mews – I’m going to turn the yard into mews, I have big plans!”
Ah, so not quite as mad as a box of frogs just yet – but on the way.
Anyway, I digress; I have been invited to attend the last commercial property auction of the year by King Sturge to see for myself what the atmosphere at ‘the coalface’ of property is like. So, on a rainy Wednesday afternoon I dart into the luxurious hotel Le Méridien in Piccadilly, London and into the auction room.
What strikes me first is the mix of people there – young, old, women, men, men in suits, men in jeans, men in turbans, men in skullcaps. Some have come with their partners, many with colleagues, one man has brought his 12 year-old son and the rest are just with their phones – bidders on the other end of the line barking out orders.
Despite the variety of people milling around, the room is by no means full. This does not deter Felix Rigg, auctioneer and King Sturge partner, (pictured below).
“I have been to auctions that are virtually empty and every lot has been sold,” he tells me. “Then I’ve been in packed rooms where not a single person puts their hand up. It’s very frustrating; I just end up looking at the sea of faces before me and think – why didn’t you stay at home?”
There is certainly an air of trepidation to the room, as the attendees settle in and clutch their catalogues to their chests. I notice that many don’t sit down, preferring to lean against the wall and survey the entire room, sizing up the potential bidders.
Felix informs me that at one auction in Manchester the room had a column in the middle of it, which a certain bidder used to hide behind, only his hand flashing out when he wanted to make a bid. “Most odd, it looked like the column itself was bidding...”
Odd they may be, but most of these people here today are well-versed in the proceedings. They will have devoured the catalogue before the auction, scoped out their properties of interest, made enquiries, downloaded the legal pack and even organised bridging finance to complete on fast auction purchases.
The atmosphere becomes tenser and indeed, even I get a buzz of excitement when Felix reminds the room: “The fall of the gavel is the legal point of exchange.”
Ever the professional, throughout the next hour and 17 lots, Felix does not let the pace slacken. He talks a mile a minute, he banters, he nudges reluctant bidders along until – bang – the gavel goes down and “Sold to the gentleman with the beard, propping up the left wall.”
He encourages the furious bidding wars: “Go on, sir, bid £2,000 more – scare him off...” and jokes with the hesitant ones who insist on going up by £500.
“Very well, as it’s Christmas,” he sighs in mock exasperation. “It’s with you at £138,500 – but do you promise never to make a £500 bid at an auction again?”
“No.” The bidder retorts.
With each lot moving quickly, the auction is soon wrapped up, leaving the successful bidders at the back, organising their deposits, and the unsuccessful ones leaving in a hurry.
Out of the 17 lots, 10 are sold for their guide price or over, four fall a grand or two short of the guide price and three are between £15,000 and £30,000 short of what they are able to be sold for – including two parts of Dalton Mills, (pictured), an impressive former mill in Keighley, West Yorkshire.
The Grade II listed nineteenth century mill, made up of five separate buildings, failed to entice bids, with £385,000 being mustered for the first part, which had a guide price of £400,000, and £945,000 being raised on the second part – guide price £975,000.
“I was surprised about that one,” Felix admits. “It’s a Grade II listed building and so there are no rates payable on the empty parts it, which I’m sure will help tempt post-auction buyers.”
Overall, however, he is pleased with how it has gone. “We have sold about 70 per cent, and in this market to be selling 70 per cent of lots is in line with the industry average – if not better.”
A few days later, Felix tells me that another property has been sold post-auction, taking the success rate to 75 per cent, with another property poised to go imminently, which could tip them to a healthy, above-average 80 per cent.
And with predictions for next year’s property market veering wildly, it will be interesting to see whether these figures can be sustained past the next King Sturge commercial property auction, taking place in February.
“We have some very exciting properties in the pipeline,” Felix confirms. “We’ll just have to see how the next couple of months pan out.”
· The next property auction from King Sturge will be held on the 23rd of February in Piccadilly, London, and all properties must be entered by the end of January. For more information click here.
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