OPINION: Phil Cassidy of Venmore

Mar 5 2008 by Tony McDonough, Liverpool Daily Post

The auction market at the back end of 2007 was without question feeling the crunch. However, this year we have seen a marked increase in specialist property investors returning to auction.

These investors have seen panic before, as recently as 2004, when interest rates were hiked up. Then, as now, there was a slowdown before the auction market picked up again in 2005.

This experience means investors are wiser to housing market indicators and the outlook is starting to look much better. Interest rates cuts in December and February have certainly boosted the market.

According to Property for Life’s monthly index tracker, two thirds of the 8,000 investors questioned said the cuts have helped ease their financial pressures. A further 80% said they believed now is a good time to invest in the property market.

Investors are keenly aware that demand for buy to let properties remains strong. Rents rose at their fastest rate on record last year. And last week Paragon Mortgages reported that rental incomes increased 2.5% last month alone.

Here in Merseyside, buy- to-let demand remains strong in desirable areas such as Allerton, Woolton, West Kirby and Hoylake where there is a variety of housing, and not just apartments.

Moreover, builders, developers and investors are being attracted back to auction by the very fact there is less competition.

Existing investors are ideally placed to cash in on the market, particularly those with larger portfolios and the capital to put down a substantial deposit.

Furthermore, interest in auctions is being raised by an expected increase in empty commercial and industrial buildings coming onto the market. The Government’s move to scrap business rates relief on empty property from April 1 could kickstart the sale of many empty properties in desirable locations.

VENMORE’S next property auction takes place on March 13 at the Marriott Hotel, Queen Square, Liverpool.