7:49 am, September 11, 2024
Letchworth Motor Auctions has closed its doors after sources say a rent increase rendered the business unviable.
The closure has left many dealers out of pocket after the auction site, based in Hertfordshire, shut abruptly in the summer.
Letchworth Motor Auctions held two general sales a week as well as a popular quarterly classic car sale.
Customers who logged on to the auction site in August found it was in ‘maintenance mode’ and staff are said to have been given just three days’ notice of the closure by director Simon Morgan.
Letchworth Motor Auctions auctioneer Jim Ronan told Car Dealer: ‘Simon had no choice. The rent on the premises was approximately £65,000.
‘He’s been fighting the landlord for two years as they wanted to increase it to £149,000. He has other business interests so decided to call it a day as the new rent was due.’
Another Letchworth Motor Auctions staff member, who wished to remain anonymous, told Car Dealer: ‘As an employee you only ever get a small part of the picture on the whole situation.
‘Since being given three days’ notice, I’ve not even heard a word from Simon since July 31 – so you never know what to truly believe.’
Car Dealer approached Morgan (pictured) several times for comment but he didn’t reply. The Letchworth Motor Auctions phone number was ‘not in service’ when Car Dealer called today.
Morgan’s LinkedIn profile states he is now ‘taking time out’ and lists his time at Letchworth Motor Auctions as having come to an end last month. It now says he is ‘freelance’.
There has been anger among the 40 or so dealers who have been left out of pocket by the sudden closure.
In order to bid in the online sales, car dealers needed to leave a minimum £250 deposit, which many say has not yet been returned.
A spokesman for the property’s owner, Letchworth Heritage Foundation, said: ‘We are saddened by the demise of Letchworth Motor Auctions Ltd and that the directors decided to close the business so abruptly, giving such short notice to their staff and creditors.
‘Letchworth Motor Auctions’ lease with us was granted in September 2017 for a period of 10 years.
‘A low initial rent and a six-month rent-free period was agreed to account for the condition of the building and allow for improvement works. It was also agreed that the rent would be reviewed after five years to the open market rent.
‘Despite constructive efforts by both parties to reach agreement, a consensus could not be found, and we asked the president of the RICS [Royal Institution of Chartered Surveyors] to appoint a surveyor to act as an expert and determine the new open market rent.
‘Letchworth Motor Auctions Ltd engaged fully with the expert’s directions. The expert completed his work on July 27 and issued directions about the publication of the determination.
‘Letchworth Motor Auctions was closed on July 31 and we were notified about the appointment of a liquidator shortly afterwards.’
No details of an administrator for the business have been listed on Companies House. Morgan is still listed as an active director, although his personal details were changed on August 14.
The spokesman for Letchworth Heritage Foundation added: ‘The foundation is a community benefit society with charitable status. It is important that we work with our tenants and strive to agree mutually beneficial terms for the good of the town.
‘However, as a charity we are under a fiduciary duty to receive best value from our investment properties.
‘We worked with the tenant for over a year to agree the new market rent and it is regrettable that we were not able to reach agreement.’
Former Letchworth auctioneer Ronan added: ‘It’s a shame really, but there are not many small independents left these days.
‘Webuyanycar, Motorway and other car-buying platforms have starved the trade of stock, which really contributed to a downturn in business.’
Ronan is now working at Newark Motor Auctions.
Car Dealer filmed at Letchworth Motor Auctions for its Trade Plates YouTube series in June 2016. In the video, Morgan chatted to host Rebecca Chaplin about his business.
Main image: Google Street View
