Whole row of flats up for auction in 'real test' for property market

Published on Tuesday 16 June 2009 09:49

A WHOLE row of a dozen flats are to go under the hammer in the biggest single lot of Lothians property to be auctioned off in recent years.

Auctioneers say there has already been strong interest from investors in the block of flats on Haddington Road in Tranent.

The one and two-bedroom homes are expected to sell for up to 500,000 when they are auctioned off in Glasgow next week.

They are expected to attract buy-to-let investors as eight of the flats already have tenants on standard short leases – meaning there would immediately be an annual rental income of more than 32,000. And finding tenants for the four unoccupied flats could push the annual income to nearer 50,000.

That means it is expected to be a real test of the current state of the property market in the Lothians.

Shaun Vigers, auctioneer and director at Edinburgh-based SVA Property Auctions, said: "You sometimes get whole tenement blocks that are in a single ownership with flats let out but it's very rare to be horizontal rather than vertical. It's the first time I've offered something like 12 flats in one block.

"We already know there is a reasonable amount of interest and investors do like this sort of opportunity because they get control of the whole building.

"Based on the rent and potential rent, I'd be inclined to say we will possibly be looking at 420,000-460,000 as a guide price, but it could do up to half a million."

The building is owned by the Co-Operative and it was used as accommodation for the employees it had in the area. However, latterly it rented out the building to other tenants, and no current employees are in the building. There are eight one-bed flats within the block, with four two-beds.

Mr Vigers admitted that an investor may be able to buy the flats for a decent price now, then sell them individually for a profit. However, he added: "If you did that, you would no longer have control of the whole block.

"That makes it likely that, in the current market, it will interest an investor looking to let out rather than sell off individually."

The flats are being sold off by the Co-operative Group, which inherited them last year following a merger with the Lothian, Borders and Angus Co-operative Society.

Last month, more than 1.6 million was raised from an Edinburgh auction dominated by 15 properties owned by the Co-op.

As well as the row of flats on Haddington Road, the Co-op will also sell a single-storey detached home on Tranent's Ormiston Road and a 19th century cottage in West Adniston, also Tranent, at next week's auction.

A Co-op Group spokesman said: "These are properties that are surplus to requirements."

The auction takes place on 24 June at Glasgow's Swallow Hotel.