Auction Finance Update
This week we’d like to talk about auctions. As with many businesses, auction houses have had to adapt to the Covid-19 environment, with recent sales taking place virtually. Many commentators were wondering if this shift online would affect investors’ appetite.
Well, based on a couple of recent auctions the market appears to be in decent health:
- Barnard Marcus’ sale in May was a 2 day event containing 209 lots, of which 77% sold. To put this into context the previous 5 months had a 71% success rate
- Strettons had a smaller sale this week and shifted an impressive 92% of lots.
At Ortus we have always provided auction finance, so it seems a good choice for this week’s case study.
Our client had a small portfolio of buy to lets and was making her first foray into the auction world. A bid of £212,000 secured a large semi-detached property on the south coast. Her plan was to renovate the property and then to refinance onto a BTL mortgage.
Perhaps not fully appreciating the 28 day completion deadline, a week had passed before she approached her broker.
Nevertheless we were able to quickly agree terms for a 12 month loan of £137,800 and legals and valuation were instructed the next day. We were happy to use search indemnity insurance and with a motivated borrower were able to complete ahead of time.
We have remained active and keen to lend through the Covid-19 pandemic and this is just one example of the sort of deals we have completed.