Estelle Maxwell
The number of repossessed homes taken to auction by lenders soared by 85% in the past year, as banks and building societies recouped losses by the swiftest possible route.
Data from the Essential Information Group released this week showed that volumes of distressed stock have increased strongly, from 1,099 in Q3 2007 to 2,085 in the same period this year (see graph).
A number of specialist sales by Allsop, Barnard Marcus and Mustbesold.com, a joint venture between Derbyshire-based firm Graham Penney and asset manager Spicerhaart, have contributed significantly to the dramatic growth in turnover in recent months.
The EIG data reveals that auctions are becoming more central for the disposal of repossessed properties, as the autumn findings from the Council of Mortgage Lenders showed a 12% growth in repossessions. This figure is set to increase as the economy slows, redundancies rise and numbers of buy-to-let properties being taken into receivership grow at their fastest rate.
Of the 5,565 residential lots offered for sale by auction in Q1 2007, 722 were repossessed properties. In Q3 2008, these figures stood at 7,506 and 2,085, respectively. According to EIG, the number of distressed sales at auction will reach 2,800 in Q4.
Gary Murphy, residential auctioneer at market leader Allsop, which has sold 27% of all repossessed auction lots so far this year, said: “Some of the more sensible lenders are recognising it is important to sell early if the perception is that the market is falling.”
