Buying a barn at auction
I’ve been a bit distracted this week. I fell in love with a barn. Not just any barn though.
This one’s a real cutey.
All of us property people know that buildings primarily about bricks and mortar, but sometimes it’s more…….some buildings have a beating heart, a personality a character all of their own.
Despite falls in prices in many parts of the country property in this area is selling and at prices not far off or sometimes exceeding those achieved during the height of the boom.
Why? – simple – demand and supply. As I’ve explained before property hotspots are all about demand and supply. In this part of the world there is always a huge demand from generally well healed, middle class people looking to experience the delights of living in one of the most beautiful spots in the UK. Combined with is that the planning policies in the Peak Park are particularly restrictive meaning that obtaining planning permission is even more than a nightmare than normal, which provides a significant cap on supply. We know what happens when supply is limitless.
Following the usual enquiries prior to the property auction it was clear that the planners weren’t going to entertain any change to residential use. My idea was to turn Lane Side Barn, Rowland into a little holiday retreat aimed at walking, cycling types who liked the idea of a cosy authentic shelter in the heart of the Peaks.
The main obstacle to doing this would being able to get the services connected to the property, although this would be at significant cost, I’d estimated £5k; but it would be all about convincing the planners. Having spoken to one of the planners they had given me the thumbs up for my intermediate idea of a walkers’ shelter with cooking and toilet facilities. My experience, sometimes bitter over the last few years is that dealing with the planning authorities you have to play the incremental game. Getting what you really want is all about chipping away, probably over a long period of time until you get the planning consent that you really want.
In the case of this property development I was not in a rush because I was going to buy it using part of my very modest pension pot. As we know it’s not currently possible to purchase a buy-to-let property with your SIPP even though it is possible to buy into a residential property fund. It is possible to buy commercial property though.
The property auction
We assembled in Sheffield for the big day. It’s been a while since I’ve been to a property auction and what hit me immediately was the range of characters that walked through the door of the Sheffield Park Hotel on Tuesday. Spivs, builders, swarve business types, old money, young aspirant developers all kinds of background. I’d already written off my chances of winning the beautiful little barn. The property had been advertised in the Sunday Times the previous Sunday and the response and the enquiries to the Peak Planning authority had been huge. The auctioneer set the scene and primed the telephone bidders. This little barn was going to go for a fortune!
The bidding started at the guide price ……. £15,000. Then a decisive move. A bidder took the price straight up to £25,000 attempting a so called knock out bid. It failed. A new bidder joined the contest. Taking the price up to £29k. Then suddenly the bidding stopped. I was shocked, stunned. What had happened to the wall of money from London. No sign of it. I was almost paralysed. I gathered my thoughts….and shoved my arm skywards. An out of body experience as the auctioneer suddenly picked me out of my anonymity in the crowded room. I was leading the race. The bid went straight back to the second bidder who responded immediately. My turn – I upped my bid. Again like a tennis pro the bidding was batted straight back to me. £31k this time. My opponent could sense my hesitation. Straight back again. I pondered, the auctioneer looked, offered me opportunities to stay in the race. I gulped and then just as the battle seemed lost, I gathered my nerve and dropped a bid of thirty three thousand, my mind was racing. Did I have the 10% deposit I needed, was the access to the barn really adequate? Again the mystery bidder batted it back with a machine gun like rapidity. I paused, hesitated……heart racing ……….mind jumping……
This time I had to let my head overide my heart.
The barn eventually sold for £35,500.
Do I regret not going higher? Maybe… In the cold light of day, I’ve convinced myself that the access is a nightmare. I can’t see the planning authority granting permission for any realistic commercial use.
Sometimes in property, the best deals you make are the ones you have the nerve to walk away from. But as in life, you never know for sure!