Auction House sales soar 10% in challenging market
Auction House sales soar 10% in most challenging market for 15 years – as stamp duty cuts are set to stay until 2025.
Auction House UK, the country’s largest property auctioneer, has sold a total of 3,369 lots so far this year – a full 10% above the figure achieved for the same period in 2021.
The group’s success rate has also remained steady at 80% for the year to date, with the total money raised for clients standing at over £534m (£534,017,610) – up on the £520m (£520,167,529) raised at this stage last year.
Auction House Managing Director Jeremy Prior said: “Despite uncertain market conditions, Auction House has continued to buck the trend, still successfully selling four out of every five properties in its auctions - which is a testament to the expertise and reputation of our teams. By contrast, several other auctioneers are struggling to sell around half of the lots they list, and some companies are hovering nearer to just 30%.
“This is unquestionably because of a general sense of nervousness in the market – caused primarily by a fear of ever-increasing mortgage rates and subsequently a more cautious approach to buying. The number of private treaty sales are dropping due to reduced stock, and deals are falling through because of mortgage offers being amended.
“Meanwhile, the Office for Budget Responsibility (OBR) has said it expects housing activity to slow over the next two years, and the Chancellor announced in his Autumn Statement yesterday that the stamp duty cuts introduced by his predecessor are going to be abolished by the end of March 2025. Whilst disappointing, crucially it does mean that this support for the housing market will continue for another 28 months – at precisely the time when it needs it most.”
Jeremy Prior says that the trajectory of the market will in part be down to managing the expectations of sellers. He added: “Vendor expectations on the value of their properties need to be realistic. They should be guided by the prices suggested by our team of knowledgeable experts based in over 40 regional offices around the UK, all of whom have their finger on the current pulse of local market conditions.
“However, the beauty of auctions, of course, means that the market will find its own level. Sellers will always set a reserve price - a safety threshold below which they are not prepared to drop. Then they can sit back and let the competitive environment of the auction room, driven by our talented and experienced auctioneers, work its magic.
“What’s more, high interest rates can be something of a double-edged sword. At times like this, buy-to-let investors may be reassured by the fact that some of the increased fees can often be partly offset by higher rents, rising because demand is outstripping supply.
“Whatever the circumstances, the key thing to understand is that we are a solutions-based business. If current market conditions mean that you need to sell quickly, whether that’s tenanted stock, a commercial or residential property, auctions can often provide what the rest of the property sector can’t – namely speed and security.”