Property sales not as strong as this time last year
UK auction houses sold almost 500 fewer properties in February than in the same month last year, when figures were boosted by the impending 3% stamp duty hike for buy-to-lets and second homes.
The overall total raised at residential and commercial auctions last month fell by just over £100m to £571m, a drop of 15% compared with February 2016, according to Essential Information Group.
The residential market saw the biggest dip, with the total raised dropping by almost 17% from £484m in February 2016 to £403m.
The commercial auctions market also saw a drop, although it was less severe. The total raised fell by almost 12% from £190m in February 2016 to £167m last month.
However, figures for the three months to the end of February show a 3.1% rise in total raised and the past 12 months have seen a 2.5% increase.
Overall, figures for UK auctions last month showed a 13.5% fall in lots offered and a nearly 14% fall in lots sold.
A definite surge
John Townsend, auctions consultant at law firm Harold Benjamin, said: “On the residential side of the market, there was a definite surge [in February 2016] in vendors and buyers trying to beat the deadline before the rise in stamp duty came into effect and the punitive treatment of buy-to-let investments.
“On the commercial side, there were early signs of a move by investors from buy-to-let to commercial.
“Neither market has shown any signs of flagging this year, with demand for product continuing to outstrip supply – which, when mixed with sensible pricing and realistic reserves, should continue to show positive signs for the rest of the year.”
David Sandeman, director at Essential Information Group, said: “Analysing the market’s performance during February over the course of the past decade illustrates that last month’s results are on a par with previous years’ results, and not in the disarray that the percentage falls would suggest.”
Lots offered and sold were at a similar level to February 2015 and the total raised was up by 20% on 2015 (see graph).
Sandeman added: “Positive gains are evident in many northern regions of the UK for the rolling quarter, where lower house prices mean stamp duty is less of an influence.” The North West performed particularly well.
Spike in transactions
Savills’ director of residential research, Lucian Cook, agreed that last year was a blip. “We had a big spike in transactions last year in the rush to avoid the 3% stamp duty rise. In addition, the buy-to-let lending terms have got much tighter,” he said.
In London, the rolling quarter figures show the total raised at residential auctions was down by 15.2%, while commercial totals were up by 30%.
Overall statistics February 2017
| Auctions held in the UK | 119 |
| Total lots offered | 3,849 |
| Total lots sold | 2,989 |
| Percent sold | 77.7% |
| Total realised | £571m |
Sales volumes: North east
| Dec 16 – Feb 17 | Total | % change | Residential | % change | Commercial | % change |
| Lots offered | 769 | – 4.8% | 716 | – 3.8% | 53 | – 17.2% |
| Lots sold | 588 | + 3.4% | 549 | – 2% | 39 | – 20.4% |
| Percent sold | 76.5% | + 1.5% | 76.7% | + 1.9% | 73.6% | – 3.9% |
| Total raised | £46M | + 7.2% | £37M | τ- 7.7% | £9M | – 5.4% |
Sales volumes: North west
| Dec 16 – Feb 17 | Total | % change | Residential | % change | Commercial | % change |
| Lots offered | 1,400 | – 2% | 1,119 | – 3.6% | 281 | + 5.2% |
| Lots sold | 1,075 | + 0.7% | 848 | – 1.4% | 227 | + 9.1% |
| Percent sold | 76.8% | + 2.7% | 75.8% | + 2.3% | 80.8% | + 3.7% |
| Total raised | £113M | + 4% | £64M | – 9.4% | £49M | + 29.1% |
Sales volumes: North west home counties
| Dec 16 – Feb 17 | Total | % change | Residential | % change | Commercial | % change |
| Lots offered | 372 | + 9.4% | 294 | +11.4% | 78 | + 2.6% |
| Lots sold | 297 | + 2.1% | 224 | + 0.9% | 73 | + 5.8% |
| Percent sold | 79.80% | – 6.8% | 76.20% | – 9.4% | 93.6% | σ+ 3.1% |
| Total raised | £101M | – 6.2% | £63M | – 2.6% | £38M | – 11.4% |
Buyers: figures will bounce back
Private investor Ray Elliott, who buys mainly residential property, said he expected the figures to bounce back next month. “Auctioneers have had to lower their expectations a tad, and if the government is charging us 3%, somebody has to absorb it,” he said.
Nilesh Patel, a director at commercial specialist Prideview Group, said: “Auction sales rates among the national commercial houses have been consistently around 90%, suggesting buyers’ and sellers’ pricing expectations are in equilibrium.”
David Callaghan
