Flats appeal to a broad spectrum of buyers, whether you have a flat in an ideal student housing area, a large apartment that will attract family buyers, a compact studio that presents affordable accommodation, or a luxury flat in a prime city centre. There are, however, some scenarios where a flat doesn't sell and ends up languishing on the market without any viewings or expressions of interest in sight.
While that may be due to issues with the leasehold duration or the condition of the flat, you will normally find that selling at auction as an alternative is a great way to conclude your sale, achieve your asking price, and move forward without delay.
In this article, we’ll discuss why your flat may not be selling and whether a property auction is for you.
Key Takeaways
Various factors can hinder the sale of a flat, such as short leasehold durations, high service charges, adverse market conditions like high inflation and interest rates, and presentation issues.
Additional challenges include complications from existing tenants and financial difficulties exacerbated by regulatory changes (e.g., post-Grenfell cladding requirements), which can severely impact buyers' ability to secure mortgages.
Auctions provide a high certainty of sale with about 75% of homes attracting bids above the minimum on auction day.
This method counters the misconception that auction sales yield lower prices and can prevent the need for drastic price drops, with competitive bidding potentially driving final prices higher.
Common Reasons a Flat Doesn’t Sell
Have you checked the details of your lease?
We mentioned the lease in the first paragraph and for good reason - this is the first factor to review if you are unsure why you’re finding it hard to sell your flat.
Because a flat is part of a larger building, you’ll normally have a leasehold period that passes from one owner to the next, potentially with service charges paid to the freehold owner who owns the land the structure sits on.
Flats with a very short leasehold period remaining, with steep service or maintenance charges or any other issues, can be much harder to sell – at least to a general buying audience where the buyer is typically purchasing a home to live in.
Other reasons flats may not attract the interest you had expected include:
A sluggish property market, where downward trends might impact the number of buyers deciding to purchase a home at any given time.
Issues with inflation and high interest rates influence the proportion of prospective buyers who will be keen to proceed with a mortgage application while rates remain high.
Presentation challenges – either related to the flat itself, the communal areas within the building, or the external appearance of the property and gardens.
Having a sitting tenant or a tenant in situ. If the tenant has the right to remain in the flat indefinitely, or there is a long-term rental agreement in place, you may find other landlords reluctant to purchase the home if they believe they could command a higher rental price.
Difficulty in getting finance: After the Grenfell tragedy, a number of high-rise flats were inspected and found to have inadequate cladding (or cavity barriers). This meant that lenders pulled their flat mortgage products overnight, plummeting the property value and leaving flat owners unable to sell their properties. However, an auction sale may be ideal due to the prevalence of cash buyers.
If you can’t identify anything in particular that is likely to affect the sale of your flat, and you need to complete your sale as swiftly as possible, an auction may be an excellent solution, with the selling process supported end-to-end by our experienced auction teams.
How Does Selling a Flat at Auction Work?
Property auctions offer a high degree of certainty that you will sell the first time your flat is entered into an auction, with around 75% of all homes attracting a bid above the seller’s minimum on the day – coupled with competitive bidding that can help to drive the final bid higher.
Contrary to common misconceptions, an auction sale doesn’t necessarily mean accepting a lower price, especially if a flat has been on the market for a long time, and your only alternative would be to consider dropping your asking price.
The process itself is straightforward, and our capable auction team manages every aspect while providing guidance so you can make informed decisions along the way. In summary, selling a flat at auction involves:
Appraising the flat, taking high-quality photographs, filming a video walkthrough and collating particulars such as the layout.
Liaising with your Solicitor to providePutting together the legal pack, including deeds and certifications relevant to buyers who may be interested in making an offer.
Marketing the flat through a large network of engaged, registered bidders. New bidders may also register to participate in an auction to be able to bid against a newly available flat.
The auction day itself, where verified bidders submit their offers. You can watch bids arriving, see when the most recent bid was placed, and track the progress of the sale.
Once the auction has ended and the final bid exceeds the reserve price, the auctioneer will manage the final details. The standard process is for the successful buyer to remit a deposit there and then and the full balance within around a month.
This speed and efficiency are among the biggest priorities among auction sellers, who receive their funds substantially faster than through a conventional flat sale.
You can read more about auctioning a flat here.
What do our auctioneers say?
“We’ve facilitated the sale of numerous flats that are unable to be sold via private treaty. For flats plagued by issues like short leases, lending issues or restrictive service charges, the auction environment guarantees that the property will reach buyers who are ready to commit.” Sam Kinloch
The Advantages of Selling a Flat at Auction
We’ve talked about the pace of an auction sale, and this applies equally to any property type, whether you're selling a flat to purchase a new property, selling an investment apartment, or have a commercial or mixed-use building that includes a residential flat.
On average, from first instructing Clive Emson Land and Property Auctioneers to act as your auctioneer, it takes approximately eight weeks until completion.
The other benefits are just as compelling if you’ve been struggling to sell a flat:
Auction sales are binding, and the auctioneer will facilitate the exchange of contracts straight away – meaning the buyer is committed, has paid a deposit, and will not back out. Unlike a standard flat sale, there is very little potential that the sale will fall through.
Auctioneers market flats to large databases of professional, private, local and nationwide buyers, many of whom may be looking for precisely the type of flat you are selling. Rather than relying on a smaller local audience of homebuyers, your flat is marketed to a wider demographic.
Efficient viewings, with various options such as hosting an open house for all interested parties, offering block bookings to avoid multiple individual viewings for each individual bidder, or using the video walkthroughs to showcase all the details of the flat digitally to buyers who may not intend to visit in person.
If you'd like to learn more about selling a flat at auction or finding the right solution to complete a sale on an apartment that isn't moving – for whatever reason – the Clive Emson team can assist. While there are many reasons a flat might prove hard to sell, an auction is often the fastest, most secure and streamlined solution, with assistance throughout the sale to ensure you are happy with the arrangements made.
