In the past 12 months, investors have bought more than £4bn of residential and commercial property at in-room auctions across the UK.
It’s an impressive indicator of the amount of equity in the system and – perhaps surprisingly given the political and economic backdrop – it is down by only 11% on the same period the previous year.
But let’s not get carried away: as the latest figures from Essential Information Group show, this is a challenging market for everyone.
Residential sales are down by 7.8% to £3bn for the 12 month period, while October alone saw a drop of almost 10% to £269m. However, many estate agents would be envious, says EIG managing director David Sandeman.
“Anecdotal reports coming out of estate agents suggest that auction sales have not dropped nearly as much as private treaty sales,” he says.
Commercial auctions are holding up reasonably well in a subdued wider market. Sales in the 12 months to the end of October dropped by almost 20% to £1bn year-on-year.
Part of the explanation lies in the decline in £1m-plus lots coming up for sale. There is a sense among price-sensitive buyers and sellers that now is a time to keep your powder dry.
“If an investment is producing good income and you don’t need to sell, you’re far more likely to wait for clarity,” says Sandeman.
But here’s a small, encouraging sign: while the number of lots offered through the room has dropped slightly (by 5% over the 12-month period), the number of lots being offered in the fledgling online auction sector is growing (see graph).
EIG figures for the first half of 2018 estimate that more than 3,000 lots have been offered online – up by almost 50% on H1 2017. To be clear, this does not equate to lots sold but it does suggest that the popularity of auctions is far from on the wane.
To send feedback, e-mail julia.cahill@egi.co.uk or tweet @EGJuliaC or @estatesgazette
