By Peter Hornor, chartered surveyor and auctioneer with Brown & Co in Norwich:
Historically, auctions have suited a variety of residential, commercial and rural property but where property is let there is often an income producing opportunity that an auction sale is able to capitalise on. With interest rates being so low in this current economic climate this is particularly the case; in the course of the last six months we have certainly seen a number of different buyers transferring assets from cash into real property. Typical investment lots include houses in multiple occupation, properties subject to assured shorthold tenancies and regulated tenancies.
For properties sold subject to an assured shorthold tenancy, there is scope not only for an immediate income but also to obtain vacant possession at some time in the future and houses subject to this sort of tenancy offer greater flexibility than was possible in the past. Many buyers look at acquiring a property that is capable of being let under such an arrangement to supplement their pension and the only thing we would say is that in these cases it is always sensible for buyers to look to the long term because property values can go up and down. The higher the return, the more complicated things can become; houses in multiple occupation let to students perhaps command a higher income but are more costly to manage and nobody should go to auction and buy without the necessary professional advice from a Chartered Surveyor.
Protected or regulated tenants are now less common but are a good bet if you find the right house at the right price. For the discerning purchaser it follows that residential property capable of being let could be a good bet under current economic conditions. Equally, the auction sale is available to those vendors looking to achieve a certain result and our advice to people looking to sell is that if you have something that is capable of being let to derive an income then an auction sale could meet with your objectives.
*Peter Hornor is on 01603 767606.