What's in Croydon?
Apart from the chavs? (This song sums that side of Croydon up very well
http://www.youtube.com/watch?v=n2VcKTYAw7E 
Also check out Wikipedia for the term "Croydon Facelift"
)
There's loads of local businesses that would be willing to pay for advertising space on such a named site. The domain does have some value but certainly not in the range of £40,000+. It would be interesting to see how far they would have been willing to come down if I'd started bidding larger amounts but I wasn't going to risk bidding more than I was prepared to pay just in case they said yes!
I might try again and go up to about £300 just out of curiosity to see if they start dropping the price by more reasonable amounts though I doubt they'd settle for anything less than five figures.
Has anyone had experience with dealing with these domain brokers before?