22 June 2022
Britain has been gripped by a brutal cost of living crisis, triggered largely by Russia's war in Ukraine which has seen the cost of everyday essentials and prices at fuel pumps throughout the country skyrocket. By the morning of the auction on 16th June auction, inflation had soared to 9% and The Bank of England announced that morning a further interest rate rise by 0.25 percent to 1.25% as a result of inflation expected to rise to 11% later this year.
Despite a typically busy room down at Nottingham Racecourse, it was quickly evident that buyers were being hesitant as the auctioneer struggled to gain momentum on a number of lots, leaving them unsold and some way from the clients expectations on reserve. That said, there were very good results achieved throughout the bustling 54 lot catalogue of properties on offer both locally and across the UK.
Highlights included a broadly 1 acre parcel of land in Stoughton, Leicestershire offered on behalf of Co-op Estates which drew a large number of bidders to the room. Guided at £15,000+ bidding was frantic and after a lengthy battle between a number of bidders ended in a record price of £123,000. Land generally performed well throughout the auction, including 3 parcels offered at Sawley by the River Trent in Derbyshire. A 5.3 acre parcel guided at £60,000+ sold in the room for £120,000, a 1.76 acre plot sold at the Guide of £55,000 and a 1.25 acre plot sold for £47,000, just above guide.
Retail investments also performed well, notably two shops in Newark town centre sold considerably over Guide, one being let to a dry cleaners and the other to a beauty salon. These were acquired by an investor looking to secure long term income driven by the current low level of interest offered by the High Street Banks, making these high yielding shops look very attractive to astute buyers.
Traditional housing was hardest hit with a lot of sellers adopting strong reserves when buyers had entered the room nervous about the fragility of the market. That said, half a dozen deals were agreed straight after the auction, as a result of the team brokering deals for the clients with an immediate exchange of contracts and on 28 day completions.
Overall, whilst the nervousness of the market was evident, we have to reflect on the past couple of years of auction trading where markets have rallied throughout COVID and record prices were being achieved at every sale, including our recent 28th April auction where we raised £5m to a packed venue. So whilst the result of this auction wasn't what any of us wanted, the risk of a price correction was deemed imminent as a result of the cost of living crisis. An like an increase in interest rates to help curb inflation, a market correction should temper the markets to provide more sensible levels of trading as we move towards our next auction on 18th August for which entries are now being received