More female buyers reported at property auctions

More female buyers reported at property auctions


A new wave of wealthy private investors is entering into UK auction houses, hoping to snap up lucrative commercial property assets, or residential buy-to-let investments.

According to statistics from the Auction Results and Analysis System (ARAS), in the last quarter of 2009 auction sales of commercial property to private investors more than doubled from the same period in 2008.

Whilst there is still the vanguard of elderly bidders in the auction rooms paying in cash, the average age of investors now stands at 55. More significantly, there have been increasing numbers of lone female investors, mostly in their mid-40s, and younger investors.

James Cannon, of newly-launched Mayfair–based auctions firm Cannon Capital, has said: “I’ve noticed there are a lot more women in sales rooms nowadays. In residential auctions, buyers have always been mixed and you get a lot of owner-occupiers, but in the commercial market this is a new trend.”

He adds that female bidders tend to have “made their money elsewhere” but are seeking to invest it in an income producing property asset.

Enquiries from female investors pre-auction indicate that most plan to place properties within a Sipp. Small retail properties let to a strong covenant are also very popular.

There are several reasons for this new wave of investors. A key factor is the lucrative yields on income-producing commercial assets sold at auction. By the close of 2009, average yields on commercial assets were 6.85 per cent, falling to 5.3 per cent on prime assets – those in better locations, let to established tenants.

Independent financial advisors are also backing auctions as a way of achieving good returns on a property investment. Many are pushing their clients to gain exposure to directly held commercial and residential assets.

TV programmes such as the BBC’s Homes Under the Hammer are also helping to attract bidders, educating the general public about the auctions process and pushing up prices.

Overseas investors are also being drawn into the UK market as a result of the weak pound, with data from ARAS showing that 50% of buyers come from overseas. Some countries show more willingness to buy riskier assets, such as vacant commercial properties, owing to the reduced competition.

The auction market may not be for everyone. Key assets for success are patience, tenacity and a great deal of research – and most importantly, tonnes of cash. Incipient risks such as rental voids, falling rents and business rates liability on empty properties must also be considered. But apparently this is not enough to scare off the brave new generation of commercial investors.

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