Low success rate for Strettons to open 2017

Strettons has recorded its lowest success rate in a decade at its first auction of 2017.

It raised £8.5m at the sale last week - almost £4m less than at its February 2016 auction. In total, 23 lots of the 37 offered were sold, reflecting a success rate of 63%, the lowest success rate since 2008.

Strettons said the 3% stamp duty surcharge and buy-to-let tax changes had made investors more cautious about investing in residential.

However, a number of properties sold for above their guide prices. A freehold commercial investment in Camden Town sold for £491,000 against a guide price of £315,000, representing a 3.16% gross yield.

The largest lot was a house split into three flats in Highbury, London, which sold for £1.38m, reflecting an initial gross yield of 2.7%.

“Overall, I am pleased with the results but there are undoubted signs of the buy-to-let market being impacted by tax changes and the 3% stamp duty penalty, which may encourage investors to look more closely at commercial investments,” said Strettons director Philip Waterfield. “Given the interest in commercial properties at the sale, I think we are beginning to see evidence of this in the auction room.”

Strettons’ next sale will be held on 29 March at the Grand Connaught Rooms, London.

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