Commercial auction sales jumped by nearly 16% last month compared with July last year, according to the latest figures.
Data from Essential Information Group showed that the total raised from commercial auctions in July was £190m, upby 15.8% from £164m in the same month in 2016.
The new total reflects an upturn in commercial sales after a 2.7% drop in June, and an 8.5% fall in H1 this year compared with 2016.
Analysis of lots offered and sold in commercial auctions revealed drops of 12.5% and 11.2% respectively, indicating that more high value lots were being sold at auction in July.
EIG director David Sandeman said the figures “indicated a steady if not positive marketplace”, and “reflected the challenging economic and political backdrop over the past 12-18 months”.
The overall auction figures, including residential sales, were up by 7.6% in July compared with the same time last year, with an increase in total raised from £490m to £527m.
The residential total raised was up 3.4% to £337m.
In London, the total raised, both residential and commercial, was up by 1.7% from £278m to £283m, in the three months from May to July, despite a drop of more than 6% in lots sold.
The total represented a reversal of the downward trend seen in the capital in recent months, with a 5.3% drop in the second quarter.
What the auctioneers say
■ George Walker, partner at Allsop: “The general election affected the market a little, certainly in the commercial sector, and sellers held back from instructing us. They always do around election time. We saw this around the Scottish independence vote in 2014, the 2015 Miliband general election and Brexit in 2016.
“Once this was out of the way, both buyers and sellers felt more comfortable getting back to business.
“The underlying commercial market has been strong for some time, with average success rates being maintained at just below 90% for the past three years, so this increase was a reflection of that trend and of the constant demand for yield on cash. Despite what the politicians would wish for, our buyers’ appetite for returns on their cash exceeds their worry about geopolitical events.”
■ John Barnett, Barnett Ross auctioneer: “I believe the increase in commercial sales is based on the low interest rate, coupled with the higher costs of buying residential, which include stamp duty and interest rate relief changes.
“These make commercial property more popular.
“Commercial investors can achieve returns far in excess of savings, while typical leases provide an income at least four times a year, on full repairing and insuring terms.”
■ Oliver Childs, Lambert Smith Hampton’s head of auctions: “Our average lot size sold has risen significantly, from £227,000 in July last year to £350,000 this year.
“We enjoyed our most successful auction last month and we are talking to some new clients about possible lots for the next sale in October valued at more than £5m.”
■ Paul Thompson, managing director of Pugh & Co: “We’ve seen the momentum in the Northern market continue to build, based on value for money and relatively cheap property prices. Our own July auctions in Manchester and Leeds realised a positive £9m of sales for clients, with more than 80% of lots sold.
“Despite a seasonal dip in sales, the North West has held its place as the country’s top performer for commercial. The North West is also shifting well over double the number of lots that have been sold under the hammer in London.”
David Callaghan
