August Property Auction Market Update

Difficult To Make Many Conclusions on the Property Auctions Market This Month…

Introduction

July is to some extent the end of term for the property auctions as well as the schools. That doesn’t mean things slow down by any means. It generally means the market is quite busy as buyers, sellers and auctioneers are keen to get business done before the summer holidays.

But of course there is a very different feeling in the wider property market this year. The talk on the streets is that the market is slowing down considerably, and most stats show that house prices are now declining not just on a monthly basis but also on an annual basis too.

So how did that affect the auctions business in July?

Lots offered not that high but not that low

The number of lots brought to sale indicated that the market was busy enough, though not especially so, for this time of year – but see below. A total of 2,358 properties went under the hammer at the auctions we track. This was almost 20% more than in June, although well down on May which set something of a record for recent times.

Which property auctioneers held sales in July? (And just as importantly who didn’t?)

A couple of the major auction houses, Barnard Marcus and Allsop Residential, didn’t hold a sale in July. These auction houses had a particularly busy June however and have sales in early August. This almost certainly had an impact on the total number of lots offered in July which otherwise would probably have been much higher.

The largest seller by value in the online arena was, as usual, the Auction House network with £34m of sales followed by McHugh & Co. with just short of £30m of sales. Auction House London, usually the biggest Auction House sale, did not hold an event. Auction House East Anglia held something of a bumper sale this month, raising over £7m. Savills topped the live streamed sales charts with £42m of sales.

Percentages sold drop slightly, but turn volatile

On average the percentage of lots offered which sold this month at the sales we track was just slightly over 68%. This represented a slight decline, especially after a number of months at the start of 2023 when it looked like the percentage of properties sold at auction was strengthening. It’s probably too early to say whether this represents a softening of buyers’ interest in clinching that property on the day, but it is probably a statistic to keep an eye on.

Continuing the trend of the last three months at least the chances of selling were better at a live/live streamed sale than online (70.55% versus 65.7%). Could this be a hint that buyers prefer live sales?

Sales rates at individual sales showed a degree of volatility – or, to put it in casual terms, were literally all over the place. Of the 40 or so sales a handful (literally) managed to sell 90% or more of their lots. One sale only managed to sell 14% of their lots, which must have left a lot of sellers disappointed on the day. Following last month’s lowest-of-the low of 38% it is the lowest sales rate seen for many a month (if not ever).

Amount raised not that high but not that low

The total raised at all kinds of sale in July was £262.5m – well under the £390m raised in May but noticeably above the £248m raised in June. The best conclusion we can draw here is that it is neither high nor low. It was pretty much as might be expected at this time of year and especially bearing in mind the large auction houses who did not have sales.

Auction prices seeing a downturn – perhaps?

One interesting statistic we have been tracking in recent months is the average amount raised per property sold. This might give a clue both to the general direction of property prices and activity in the auction market.

This month the average price of a property sold at auction was £113,409 – down from around £123,000 the previous month and well down from the circa £130,000 cost of an auction property since the start of 2023.

In particular, the average price of a property sold at the online auctions was just a shade over £96,000. This looks like quite a bargain when the average price of a property in England is still over £280,000.

Summary

To go back to the question we posed in the intro. Has the much-heralded slow down in the wider property market hit the auctions market yet? The answer is yes or no, but probably not.

As it usually is in the pre-holiday period business continued to be brisk at the auctions last month. There was no shortage of sellers and buyers and the amount raised was pretty much as expected. The sales rates and amount raised per property do perhaps indicate a slight softening in the market, but by no means do they indicate a trend as yet.

Looking ahead, this autumn will be a very interesting time for the property auctions. Many experts expect the wider property market to slow down considerably, and prices to take a sharp downturn, in the coming months. If anything, the property auctions tend to be a barometer for the wider property market in that they forecast what will happen several months down the line. That doesn’t seem to be the case just yet however.