A popular car auction house has closed its doors after facing a dramatic rent increase, according to sources.
Letchworth Motor Auctions, Hertfordshire shut so suddenly that many dealers claim to be left hundreds of pounds out of pocket.
Closing abruptly in summer, the site was known for two sales a week on top of a quarterly classic car sale.
Whilst the business does not seem to have addressed the closure directly, its website and Facebook page are no longer available.
It has been said that staff were given just three days notice before the closure by the director Simon Morgan.
Whilst buyers attempting to access the site in August were notified that the site was in maintenance mode.
Letchworth Motor Auctions auctioneer Jim Ronan told Car Dealer Magazine: “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.”
Whilst an anonymous staff member said: “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.”
According to Morgan’s LinkedIn profile, he is “Taking Time Out”.
His role as Managing Director for Letchworth Motors Auctions Ltd has been listed from August 2012 to this year, claiming that “it’s never been easier to buy or sell a vehicle”.
It seems the South-East based businessman has now begun a new freelance position from last month.
There has been no further explanation added to the profile.
With the sudden closure, around 40 dealers have been left out of pocket.
Many car dealers have claimed on social media that their £250 deposits, which were required to bid online, have not been returned.
One Facebook user commented: “Took our holding deposits of £500 and done a runner.”
Whilst another asked: “How to get the deposit back, nobody answer the phone.”
The Sun has approached Letchworth Motor Auctions for comment.
According to Letchworth Heritage Foundation who own the property, the lease for the auction house was granted in September 2017 for 10 years.
When approached for comment, a spokesperson for 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 ten years. A low initial rent and 6 month rent free period was agreed to account for the condition of the building and the improvement works Letchworth Motor Auctions Limited would undertake.
“It was also agreed that the rent would be reviewed after 5 years to the ‘open market rent.’ Both parties appointed Chartered Surveyors to evaluate the ‘open market rent’ and negotiations started in earnest in early 2023.
“Despite constructive effort by both parties to reach agreement on the new rent, a consensus could not be found, and we asked the President of the RICS to appoint a Surveyor to act as an expert and determine the new open market rent.
“The expert was appointed in December 2023 and Letchworth Motor Auctions Limited engaged fully with the experts’ directions. The expert completed his work on 27th July 2024 and issued directions about the publication of the determination.
“Letchworth Motor Auctions was closed on 31st July 2024, and we were notified about the appointment of a liquidator shortly afterwards. The expert’s determination has not been published.
“Letchworth Garden City Heritage Foundation is a community benefit society with charitable status. The income from our investment properties funds the delivery of our charitable objects which have a substantial positive impact on the garden city.
“As a placed based charity, 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 year to agree the new market rent and it is regrettable that we were not able to reach agreement.”
