Auction houses report an increase in private sellers bringing properties to market, as well as a lot of interest from buyers
Auction houses have seen a rush of business as buyers try to purchase before the stamp duty changes hit buy-to-let landlords on April 1.
Allsop, an auction house based in London, has 311 properties on its books for the next auction on February 18, up from 255 this time last year. McHugh and Co, another London-based auctioneer, has 99 properties on its books this month, when normally there are 50 to 75.
Gary Murphy, residential partner and auctioneer at Allsop, said: “We’ve seen quite a substantial ramping up of private sellers and it’s fair to say that buy-to-let changes will have influenced many people to cash out.”
In November, Chancellor George Osborne announced that landlords would pay a 3pc stamp duty surcharge, starting on April 1.
There has been an increase in private sellers in auction houses in the past year, due to the abolition of mortgage interest relief for landlords and the anticipation that buy-to-let landlords would want to purchase properties before the end of the financial year.
Allsop reported that this number increased to 25pc last year, from 14pc in 2014.
Mr Murphy added: “It’s been a stellar year and we’ve seen a significant rise in private sellers – compared with banks, housing associations and councils.
“The beauty of auctions is there’s always a ready supply of buyers from all walks of life who want to snap up properties. Everyone has their own circumstance.
“We’re seeing a lot of interest from sellers and buyers right now as our next auction is the final opportunity for investors to buy without getting hit by new stamp duty rules.”
Those hunting for a buy-to-let investment property often use auctions because of the opportunity to find bargains due to a low reserve price and also the speed of completions, which are usually finished within a month.
Unlike negotiations with estate agents, deals are legally binding with a hit of the gavel and fees are typically much lower.
The sort of properties that are put up for auction are often investment properties those repossessed by banks, or sold on by housing associations rather than dream family homes.
Last year saw record sales at Allsop, which recorded a total of £445m residential properties sold in 2015, a 9pc increase on 2014’s sales of £421m.