Terraced Properties Prove Popular In Auction Rooms - 16/11/11
Increased demand for terraced property is fuelling a surge in classic 'two- up, two-down' purchases by savvy auction room investors.
Currently, just over a quarter of all homes purchased in the UK are terraced. Research has revealed 38 per cent of house hunters would choose a terraced property over a detached house, semi or flat* making them popular choices for buy to sell investors.
Auction Finance Limited, a national short term lender, which provides funds for purchases before, during and after an auction, has lent more than £8M for the purchase of terraced properties this year. An increase of 22 per cent compared to 2010.
Over the last decade, terraced properties have increased in value more than any other home type, in contrast to flats which have gone down.
The majority of repossessed properties are terraces and these regularly provide quality stock for auction rooms. With the boom in the rental sector, these properties are being snapped up by yield-hungry buy-to-let investors, says Chris Baguley, Director of Auction Finance Limited.
Baguley, said:
"As the property market picks up terraced property prices are likely to keep increasing, more so than other types. Investors need to act fast. A large bulk of our lending is to buyers investing in terraced houses. We're seeing a renaissance for this type of property.
"Auctions offer the buyer the chance to purchase property at what are effectively discounted prices. We're seeing houses that have been on agents' books for £100,000 go for as little as £55,000 in the auction rooms. They've always been popular but we could see a real boom over the next 24 months. People are going back to basics with investments, terraces are a safe option.
"Terraced properties appeal to a range of people from first-time buyers, buy-to-let investors and students. Many have a lot of period character, a great sense of community and above all affordability - it's a home type for the times and both buyers and sellers recognise this."
He added:
"The likes of Sixty Minute Make-Over and Property Ladder are fuelling this popularity as viewers see how traditional terraced properties can be transformed into contemporary stylish homes."
The average price of a terraced property has increased 68.4 per cent to £151,332 in the 10 years to the second quarter of 2011, said the Halifax.
Earlier this year an extravagant townhouse became Britain's most expensive terraced home after selling for £35 million.
Auction Finance Limited typically lends 70 to 75 per cent on a property and loan sizes vary from £25,000 to £1m, with an average loan size of £74,500.
Auction Finance Limited works with auction houses across the UK including Auction House, Eddisons and Clive Emson.
For those looking to invest in a terraced property at auction for the first time, Auction Finance Limited offers these top tips:
- Location. Terraced properties remain popular in the buy-to-let market, however generally come with little outdoor space. Check there are parks and green areas nearby.
- Safety. Consider the traffic and street lighting and who has access to passageways running by the terrace.
- Maintenance. Check the structural condition of the property. If you're uncertain of warning signs get a professional to inspect the property prior to the auction.
*Research by Nationwide
