Property auction sector growing
A nationwide survey of property auction houses, carried out by specialist lender Auction Finance, has revealed the majority are confident the sector will grow this year with 81% reporting an increase in the number of people attending auctions year-on-year.
According to the survey, 78% of auction houses were confident the property auction sector will grow this year, compared to 2012. 89% of the auctioneers polled said they expected residential property prices to increase this year, with 69% expecting the same for land prices.
The findings echo recent statistics from auction data analyst, Essential Information Group, which found lots sold at auction in the first half of 2013 increased by 4% to 9,979; excluding 2007, the highest number ever recorded.
The total raised grew 11% to £337million in the first half of 2013, up 11% year-on-year.
Chris Baguley, director of Auction Finance, said:
“Despite challenging property trading conditions in recent years, our survey has clearly shown there is currently a great deal of optimism in the property auction sector.
“Nearly all auction houses are reporting an increase in visitors and there have been double digit increases in amounts raised in many regions including the North West, East Midlands, North East, South West and London compared to the same period last year.
“Our survey found private sellers were the most popular source of instructions for property with private buyers just outnumbering landlords as the most common bidders.
“With many more private properties entering the auction rooms there are some great investment opportunities for new and experienced landlords looking to add to their portfolios as the market continues to grow.” Auction Finance’s survey also revealed that a quarter of bidders need assistance with finance when a lot is purchased as they don’t have a loan or mortgage in place.
Baguley added: “Buying at auction requires immediate funding and there are a number of reasons why a loan or mortgage might not be in place before the bidding starts.
“However, as our survey shows, this is not a reason for investors to miss out on property and land as 25% of successful bidders turn to bridging finance to complete their purchase in the required timescale. A short term loan will allow the transaction to complete and give the buyer time to arrange long term finance.”