Houses selling for 70% above guide price in bidding frenzy

 
28 June 2013

A major London property auction this week saw dozens of homes bought for as much as 70 per cent over their guide prices amid ferocious bidding.

Property experts said auctions have become increasingly popular with first-time buyers, developers and even international buyers because of the chronic shortage of flats and houses on the “mainstream” market.

At the Savills auction at the Marriott Hotel on Grosvenor Square properties sold for an average of 25 per cent over their guide price.

This week, two studio flats in a mansion block, Palace Court in Bayswater, were both offered with a guide price of £130,000. One was sold for £180,000 and the other for £225,000. A ground floor flat sold by Hammersmith & Fulham council went for £111,000 above its guide price of £450,000.

It follows an even more frenzied sale last month when the star lot was a large double-fronted building near the centre of Barking. With a guide price of only £130,000, the property attracted more than 160 bids and was sold for a staggering £752,000. A run-down mid-terrace house in Fulham had a guide price of £625,000 but the hammer came down at £1.015 million.

Overall, auction sales have now returned to their pre-credit-crunch levels, totalling £275 million in 2012. The lots are a mix of repossessed homes and surplus properties owned by developers and local authorities.

Christopher Coleman-Smith of Savills Auctions said: “Buying at auction is one of the most transparent ways to purchase a property with the price being entirely dictated by the people in the room on the day. The guide price is almost irrelevant — it’s where the bidding ends that counts.”

His colleague Paul Mooney said: “Our auctions now include international buyers who are certainly on the increase, first time buyers, the bank of Mum and Dad, new age developers and auction groupies.

“It’s a great place to get a feel of where the next hotspots might be. Five to 10 years ago auction buyers were snapping up properties in Dulwich, Camberwell and Peckham. At the moment we are seeing more buyers seriously investing in places like Lewisham, Sydenham and Forest Hill.”

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