Property Auctions - Obscure Lots - Howard Gooddie
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I am not quite sure whether it is the passing of the Millennium, the
advancing of the years or merely end-of-winter SAD, but two lots in
my February auction have put me in a rather reminiscent mood for the
start of this article. I hope that this reminiscence will lead you into
the primary purpose of attending auctions - buying that bargain!
What have I seen from my rostrum and in other sale rooms that have
provoked a hindsight recollection of what good buys there were? I quite
frequently remember from the days when I was selling for the British
Rail Property Board the long, thin strips of land which they offered
which sometimes turned out to be tremendously useful and at other times
did not. Before now I am sure I have cracked the hoary old joke about
needing brochures of unusual length (or width) to cope with the long,
thin site plans. In the days when I was selling for BR, British Rail
had an urgent and justifiable need for the cash and therefore some of
their sites were offered before the possibility of obtaining planning
consents and negotiating rent reviews or renewals due or shortly renewable
had been explored. I feel sure that with more time in the buyers' hands
than in the vendors', many of those sites with additional research and
work by the purchasers showed that they were bargains. There is no need
to think that the British Rail Property Board in those days were the
only vendors who could put cash readily available to an immediate and
appropriate purpose, and it was in their interest overall to see a quick
sale. There are plenty of vendors around today who also have the same
need. Incidentally, I understand that many of the plots of land previously
owned by the British Rail Property Board are now being offered by their
successors and are listed in the Internet, and rumours in the profession
suggest that only about 2,000 sites and investments are left for sale.
Look out for two or three auctions coming up during the year 2000 including
many of these remaining sites. Evidently the intention is that the majority
should be sold before the end of the year - unless the politicians change
their policies again!
Apart from frequently being long and thin, when I continue
reminiscing about railway holdings I begin to think about how valuable
cuttings or holes in the ground can be for taking fill, once you have
overcome the problems of planning associated with pollution and the
current level of tax on landfill. If we look at the reverse of cuttings
and think of old embankments from railway lines closed many years ago,
these can often contain valuable fill material for sale on, before the
flattened site is ready for a saleable use. I frequently pass a site
in Greater Manchester - not a British Rail one - where the lucky purchaser
came to tell me what valuable sand that heap contained, and what a bargain
he had. That was before I noticed that he had obtained planning consent
for a car showroom, making the site even more valuable. It should have
been, when I look at the prices on the windscreens of the Mercedes that
are now displayed there, with many a model now priced at more than the
land cost in the first place. There is the story, not apocryphal, of
the six acres of land bought in a West Country sea port, which the purchaser
intended to be used by his daughter for horses. The horses presumably
now forage elsewhere, since on the site is one of the larger supermarkets
- a lucky purchaser indeed. A similarly lucky, but not as profitable
purchaser, at one of my auctions recently, bought (after the sale) a
municipal lavatory - then closed down - which now hosts a major advertising
site adjoining a trunk road junction. It was only last week I was reading
of a property about to be auctioned, previously used as a lavatory,
which had a planning consent for a café - my taste buds squirm at the
thought!
So where do these reminiscences take me? How should I
be advising you to weigh up auction catalogues? Here are a few suggestions:
Are there some small plots of land of obvious value to a larger development?
I have not caught up with their subsequent history, but just before
Christmas Clive Emson had two small plots (if I remember rightly, they
were offered without reserve) which had no apparent use. Was one of
our PAN readers the lucky individual who bought them, or did they perhaps
not sell? Clive Emson, for all his charisma, selling from the south
of London, was offering those two small plots up in the Greater Manchester
conurbation. I keep on trying to persuade Clive that he should be encouraging
his clients to put anything in the North West in my auctions, just down
the road! But I do wonder whether either of those two plots had a ransom
value, or were they just a waste of time.
This does prompt me to the next category of property which is often
worth researching, and I have seen several letters from readers of PAN
who have talked about the matter, and that is properties located in
your own area being sold at auctions held outside the district. It is
always worth while looking at many of the larger brochures, particularly
of sales held in London, where occasionally lots might go cheaper because
they are being sold outside their geographical area.
I was talking just a little earlier about clients who need immediate
cash, and with no time to weigh up the future prospects or research
the future of the properties they are offering, and do not have the
time perhaps to carry out rent reviews. This leads me on to what should
be your constant search for the properties that are being sold by mortgagees
in possession. 'Repossession' is not necessarily to be considered synonymous
with 'bargain' - you should still thoroughly and properly research your
target - but it appears from their success rate that there are certain
finance houses who trim their reserves in the interest of not continuing
to hold repossessed houses for a long time, for the sake of reaching
a high price. Thorough research of auction results, combined with critical
analysis of the auction brochures, may help you to discover these special
sources in the future. I must warn you however that in my experience
of selling repossessed houses the prospect of obtaining a bargain is
not always there, and I saw in roughly one in five cases of repossessed
houses offered in my sale room that the price was more than the figure
that had been asked for the property when it was offered on the market
by private treaty, so don't be carried away in your bidding merely because
you know the property was repossessed. Back to that recommendation -
do discipline yourself to fix your upper limit before you start bidding!
And how do you judge that a property is repossessed? Maybe the auctioneer
makes the job easy for you and in the brochure it has a phrase similar
to "by order of mortgagees in possession". Quite frequently brochures
carry the logo of the finance house for which the property is being
sold - Lloyds, Halifax, Abbey National etc. This of course is likely
to be an indication that the property is a repossession, but it will
not always be so. Some banks and building societies are very coy about
the public knowing that they have repossessed properties, and take considerable
steps to avoid it being known, but you can still look for the clues.
Does the principal advert for the auction contain a general list of
the clients for whom the auctioneers are acting? Do the names of building
societies, finance houses, or banks figure in that preliminary part
of the advert? Is there an indication that certain properties are being
sold on the instructions of an LPA Receiver (LPA is Law of Property
Act) or 'on the instructions of a liquidator' or similar?
Without these clues, there can be more subtle indications. The solicitor
acting may have as his address the head office of a building society
or a bank. Even without that direct indication it is possible that the
name of the building from which the solicitor operates is an indication
of the Society for which he works - "Nationwide House" or similar. It
may even be possible to link the solicitor's telephone number quoted,
or that quoted for access to the property. If all else fails, an outright
enquiry at the auctioneers' office or at the co-agent's office may reveal
that the lot you are considering is the result of a repossession.
Finally, as a guide to looking for those bargains, how closely are
you thinking in the year 2000 of the fringe areas of those that are
in demand, that are likely to be 'on the up'? Over my period in practice
there have been certain uses that have been in vogue. My immediate thought
goes back to petrol stations, post offices and launderettes in the '70s
and '80s, and more recently car wash sites, residential investments,
mobile aerial sites, and buying-to-let, at the end of the last century.
Unfortunately as yet, Internet sites don't seem to need a property base,
and although we are now reading of the sale of internet domain names,
they do not yet seem to be coming into the general purview of property
auctioneers.
And lastly, I promised to talk to you about my two recent lots which
provoked these reminiscences. I have to be a little careful, since my
editor is not too fond of too much personal promotion of my business,
but in mid-February my brochure starts with two lots which are titles
to the Lord of the Manor. There has been an increase in sales by auction
of such titles recently. Robert Smith, of the Manorial Society, is well-known
for his promotion and auctions of this type of title. Although a specialised
field, there still are bargains and profits to be made out of buying
such titles.
The two in my latest brochure are little more than an ego-trip for
the buyer since they do not appear to have any extra rights, but it
is not unusual for Lord of the Manor titles to include title to road
verges, which can subsequently be turned into ransom strips, or at worst
produce rent from telegraph poles (or, presumably, in this day and age,
mobile telephone aerials). Certain other Lord of the Manor titles contain
restrictive covenants which can sometimes produce fruitful negotiations
when development or re-development of land in the Manor is taking place.
A few titles include the right to hold a market. It is a specialised
field, but well worthy of research for those with a historical bent.
The titles are conveyed with a contract and completion in a similar
way to the title for ordinary property. They are not registered. The
titles date back to medieval times. Of the two that I am selling, the
original Manor of Poughley in Berkshire was called a manor in 1366 and
there is succession throughout the years right up to date. As far as
I know there are no manorial rights attached to the title. The second
is the Manor of Knossington in the county of Leicestershire, and here
the title starts as early as 1086, which was the date of the Domesday
Book, and its ownership has been recorded all the way through to the
present day. Any manorial rights that might have existed lapsed by the
end of the 19th century. With my sale only one day after St Valentine's
Day, I have suggested that buying the title of either of these to turn
one's beloved into a Lady of the Manor would be a unique and romantic
idea.
Enough of my self-promotion. All auctioneers have unusual lots, all
of them occasionally sell bargains - I hope you find one that falls
cheaply into both categories. Ring my office on February 16th if you
want to know the prices those Lords of the Manor sold for - or heaven
help me - if they remained unsold, you will be able to discover how
much it will cost to treat your beloved to a title.
