_Buying and selling at auction: a guide for landlords

For landlords looking to maximise their income, there are clear benefits to buying and selling at auction - including the speed and certainty auctions bring to property sales, with contracts typically exchanged on the day of the auction and completion following around four weeks later. Many landlords also appreciate having the choice of buying or selling with tenants in situ or with vacant possession, both commonly found at auction.

January 25, 2023

For landlords who are selling, the costs of holding an empty property soon escalate: service charges, ground rent, insurance and mortgage costs. Rather than fund these holding costs themselves, they might choose to sell with a tenant in place.

Richard Watson, Head of Knight Frank Auctions, says: “If, as a landlord, you sell with tenants in place, you'll be earning rent right up until the property is sold, without any loss of income. Similarly, if you're buying with a tenant in situ, it means you have an instant income stream with no fallow period.”

Some landlords prefer to sell with vacant possession - generally a more appealing purchasing option for owner-occupiers and therefore often achieving a higher price point. Landlords choosing this option could, for example, place their property with Knight Frank’s front office to sell, before - if necessary - seamlessly transitioning to an auction sale. Whichever route they choose, landlords keep control of the reserve price at all points in the auction process.

Auctions also provide significant benefits for landlords with multiple units to sell, so-called 'portfolio sales', involving a group of two or more properties owned by the same landlord and sold as one transaction. This month, Knight Frank Auctions advised a landlord planning to sell four individual properties in the same London building on the different routes to market.

“With the owner we discussed selling them individually through Knight Frank’s Southbank office or collectively through Knight Frank Auctions,” says Richard. “In these portfolio sales, buyers make savings on the stamp duty and may be willing to pass on a percentage of that saving to the seller by agreeing a higher sales price. For sellers, portfolio sales also have potential time and money savings compared with selling the properties individually.”

The number of properties for sale across the UK is currently in short supply and the start of the traditionally busy spring market is on the horizon. This, coupled with the easing of travel restrictions and a return of international buyers means that now is the time to bring your property to market if you're considering selling this year. Mortgage rates are still low but expected to increase further this year and inflation is widely predicted to hit consumers' pockets in the coming months.

“Our USP at Knight Frank Auctions is that we have access to a wide global investor pool and a network of High Street offices around the UK,” says Richard. “We can also draw upon Knight Frank Finance, a leading independent mortgage adviser, as they are experienced in all aspects of specialist lending and work closely with the Auctions team to ensure purchasers are fully prepared to buy. All this is unique to Knight Frank Auctions and adds value to any instruction.”

If you are a landlord and would like further information on how Knight Frank Auctions can help you, please contact Richard Watson (richard.watson@knightfrank.com 020 7861 5141) or visit our Auctions Site.