Auction House report 13% hike in lots sold, despite softening market
The UK’s leading property auctioneer Auction House is reporting a 13% rise in the number of lots sold this year compared to 2021 but warns that there are indications the property market may be starting to tighten.
The auction group has successfully sold 1,606 properties from 1,957 so far offered in 2022, which represents an impressive success rate of 82%, and has raised a total sum of £251,207,038 in the process – the first time in the company’s 15-year history that the £250m milestone has been exceeded within the first five months of the year.
Commenting on the results, Auction House Managing Director Jeremy Prior said: “This is yet another incredible set of figures from our Auction House teams around the country. It also reflects the time of year when property buying and selling tends to be at its peak, in the period after Easter but before the summer holidays begin.
“However, there are some signs that the property market as a whole is starting to soften. A toxic combination of factors including the increased cost of living with its associated rising inflation and interest rates, together with the international impact of the crisis in Ukraine means that there is now a noticeable air of caution amongst buyers.
“This means that vendors will have to take on board suitably realistic valuations of their properties over the coming months, in order to attract the attention of potential purchasers. Although, of course, the beauty of the competitive environment in an auction means that as soon as two or more individuals are keen to buy, final selling prices can still rise dramatically.”
Jeremy Prior says that historically auctions have performed well in difficult times - in part by being handed properties from estate agents who may need help to make a sale.
He explained: “We now know that mortgage lending fell by more than a third in April and there are currently reports that mortgage valuations are being downgraded, which has led to several agreed private treaty sales falling out of bed. Traditional unconditional auctions are obviously less susceptible to this problem, as our sales take place on the fall of the gavel.
“For this reason, we are already gratefully receiving a steady stream of corporate lots which were appraised at the end of last year for sale on the private treaty market. Having failed to sell there, they are now coming to us.
“But that’s not to suggest that properties are only arriving at auction as an option of last resort. Over the past few years, the general public has become much more aware of the wide variety of lots that sell well under the hammer, and so make a point of coming to us first.
“Such properties include those for refurbishment, redevelopment or extension, or with issues such as being un-mortgageable, with a short lease or adverse history. It’s also the ideal place for tenanted properties, vacant or occupied commercial buildings, or properties being sold as an investment. “Finally, auction is perfect for those in a hurry, those who need a certain sale or want to ensure a level playing field.
“So, while the ‘froth’ may have gone from the property market as a whole, and the year ahead certainly looks more challenging, we are confident that the traditional unconditional auction method of sale will still be able to punch above its weight.”