December Property Auction Market Update

Almost A Record Month at UK Property Auctions… But How?

November is rarely a busy month for the residential property auctions. September and October tend to be when the buyers and sellers are very active and properties fly through the auction rooms in volume. And that certainly proved to be the case this September. November is usually something of a shoulder month before a winter slowdown sets in.

Anyone expecting there wouldn’t be a lot of auction action would have been surprised this month however. November 2023 turned out to be one of the busiest auction months this year.

Later on, we’ll try and work out why.

The second busiest month over the last year

In November a shade over 3,000 lots were offered at the auctions we track. This made November pretty much (give or take a handful of lots) the joint second busiest month over the last year. Only September was busier with 4,160 lots. Notably, the number of lots offered this month was almost double that in November 2022.

Who held sales? (And who didn’t?)

Surprisingly for such a large volume of lots the numbers of auctions held wasn’t large nor anything like a record. In fact, and perhaps anticipating the normally sluggish market, some of the main auction houses didn’t actually hold a sale this month.

The figures were likely boosted by Allsop’s November auction marathon which was held over three days with more than 500 lots on offer. Over £80m was raised, with 13 lots having sold for more than £1m, and it enjoyed a success rate of 84%.

Richard Adamson, partner and residential auctioneer at Allsop, said: “We are delighted with the results of our latest residential auction, our largest and most successful since February 2018. Once again, we’re seeing the volume of supply and demand for income-generating and value-add opportunities, reflecting an eagerness within the market for well-priced stock. With every auction sale, we can provide more and more insight into trends in the market, and into how our buyers and sellers can best find value – and we look forward to continuing to build on that over the coming months including our last sale of 2023 in December.”

Worth noting perhaps is that Allsop will be holding two sales in what is normally a quiet December, with the second less than a week before Christmas.

Percentages sold soar

Last month we noted a slightly concerning drop in the percentages of lots sold to just 64.6% on average …. and even less for online auctions. There was a complete turnround in November 2023. The percentage sold this month soared to 75.4% – the joint best sales rate over the last year.

Many auction houses sold 70-80% of their lots (with a few of the smaller sales selling 100%). Even the poorest performing auctions (and poor is not really the right word here) sold around half of all their lots.

This month there was pretty much no difference in the chances of selling whether the sale was live or was held online.

Amount raised… also the second largest

In terms of money raised, November 2023 proved to be the second best performing month over the last year and by quite a margin too. £486m was raised overall this month at the auctions we track. This was second only to September’s £568m raised.

The amount raised by per property also saw a sharp upturn this month with the average price of a property sold in November standing at around £158,000. Properties sold online were 18% more expensive than live auction properties on average.

Summary

So what can we learn from our auction market returns for November 2023?

If anything November 2023 has proved that spotting trends in the auctions market is far from easy, and may only be of limited use.

A better question might be why, when the wider property market is slowing, the residential property auctions seem to have had an unseasonably busy month.

Some commentators point to landlords exiting the market before the market and political climates change, with auctions offering them a swift exit route.

Other commentators point to a rise in cash buyer/investor activity in the property market. Some of these may be jumping in to hoover up any bargains in the property market – which again is something auctions are well suited to.

Another recent expert theory, which many may not have considered before, is the impact of relistings. That is, a rise in auction volumes in one month could be due to properties being relisted having gone unsold/where a sale has fallen through in previous months. A comparison of the figures for both October 2023 and November 2023 might indeed support this.

Looking ahead, December is traditionally a slow month for property auctions (but Allsop could well disprove this theory). Also, it is unlikely the Autumn Statement last month will have much impact on buyer and seller sentiment just before Christmas. What could be more important is the next interest rate announcement on December 14, and particularly whether rates are held or cut. That really could shape the auctions market in the early part of 2024.