March Property Auction Market Update

Has Spring in the property auctions market come early this year?

February doesn’t normally break any records in the auction houses. But it is a month when the auctions awake from their post-Christmas slow period and begin to get busier in anticipation of spring. It also tends to be a time of year when the auction results offer us a few clues as to how the market might perform in the year ahead.

January 2023 was quite markedly busier than January 2022. So let’s look at whether or not that trend continued at the residential property auctions in February.

Plenty of auction lots on offer

February was the busiest month in terms of auctions held and lots offered since last September. The vast majority of residential auction houses held a sale. There were around 2,900 lots offered at the sales we track. This was five times more than in January, and was an increase on the 2,255 offered in February 2022.

The largest sales in the online arena were held by the Auction House network (511 lots) followed by McHugh & Co. (254 lots) and Allsop Residential (241 lots).

In the live and live streamed arena Barnard Marcus offered the most lots (306) followed by Savills (202 lots) and Bond Wolfe (146 lots).

To give an indication of how the market has picked up this month compared to January around £56m was raised by a single event held by Allsop Residential. This proved to be more than the £43m raised by ALL the auction sales we track in January.

Percentages sold on an uptick?

The percentage of lots sold was strong in February at 73.8%, with live/live streamed sales proving slightly more successful at 77.3% sold compared to 70.3% online. This follows January’s 74.4% overall success rate. Based on these figures (and although two months probably don’t indicate any sort of trend) the chances of selling at auction seem to be on an uptick compared to late 2022.

The great online versus live question

Sales were split pretty evenly between online and live, with slightly more lots being offered online.

A question that has often been asked since many auctions went online during Covid is whether it is better to sell at a live or live streamed auction rather than online. Looking back at our own data it appears that the live format appears to offer a better chance of selling. Though it’s hard to say if the difference is large enough to be a consideration – well priced and well-promoted properties probably have a good chance of selling whatever format they are offered by.

Interestingly one of the larger auction houses has announced that it will return to live ‘in room’ auctions this spring. Given the volume of properties they offer this will impact these statistics.

Amount raised highest for several months

As might be expected from the increased number of sales and lots the amount raised at the auctions we track was the highest for several months, and a pretty substantial amount for the month of February in general.

Auction houses sold £376.82m of property in February. This was the highest since £404m approximately raised last September and compared with just £43m in January.

Summary

Some are likely to be surprised by the large numbers of lots offered and amount raised at residential auctions in February. It turned out to be a fairly busy market that is not usually seen until spring arrives proper.

It’s difficult to come to any conclusions about why the market this month has been buoyant. Anecdotal evidence suggests that, after the mini-budget shambles last autumn, some sellers might have been waiting to sell until the market settled a little. It could also be the case that buy to let landlords and portfolio owners keen to sell before CGT allowances drop, or any further negative measures are announced in the March Budget, have swelled the auction listings.

Whatever the reasons, the strong sales rates suggest that auction buyers are not being deterred from buying right now. There are still plenty of buyers at auction. It’s likely that competitive pricing (something not covered by the data we collect) could be a factor here however.

Looking ahead, spring is generally a busier time for residential auctions anyway. Most auction houses have one or even two events over the next couple of months. If February is anything to go by March and April could be very busy indeed.

Check out our monthly updated statistics below, courtesy of the Essential Information Group (click on the key colours to highlight / dehighlight):