Constrained supply has pushed auction volumes lower in the first quarter of 2015, as investors opt to hold assets in the face of ongoing low interest rates.
A total of 4,267 lots were offered in the first two months of the year, down by 6.8% on the same period in 2014, causing sales to dip by 4% to £506m.
A further 602 lots had been offered as of 13 March and there were a further 1,800 lots due to be offered before the end of the month, according to EIG data.
That compared with a total of 2,880 lots offered in March 2014, suggesting the year-on-year dip in volumes was set to continue to the end of the first quarter.
Barnett Ross auctioneer Jonathan Ross said: “The private investors are reluctant to sell due to low interest rates, which is driving lower volumes.”
The auction market enjoyed a buoyant end to 2014 – with a 10.3% year-on-year increase in investment volumes to £1.3bn – and demand remains robust despite the current dip, with success rates up despite the lack of supply.
“We got 93% at our last sale, which shows that what stock is there is sellable. It is just a matter of getting hold of it,” Ross said.
The weaker Q1 figures come ahead of a second quarter that is expected to be affected by the looming UK general election.
Savills auctioneer Chris Coleman-Smith acknowledged the election could already be having an impact on volumes.
“It is probably a combination of that and the fact that auctioneers are being more pragmatic and selective about what they are putting in their catalogues,” he said.
