September Property Auction Market Update

August / September’s Property Auction Market Sluggish…

Introduction

August is never a very good month for spotting auction market trends. Alongside January it is generally one of the quietest months of the year. Whether that’s because no one wants to buy or sell at auction – or whether auctioneers don’t want to hold sales – is open to debate. Either way, the numbers are generally sparse.

Nevertheless, while it’s important to remember that summer rarely sets any records, there were a few interesting points within the auction market returns this August. Let’s cast our eye over them.

Slower … but much like a normal summer

As expected the number of lots was relatively small this month. Only 897 properties were offered at the auctions we track – the second lowest offering this year and less than 50% of the monthly average in recent times.

Lots were almost equally distributed between online sales and live/live streamed sales. Over the last year at least there has been a trend for online auctions to be the most common way of selling – could this be about to change?

Who held sales? Which were biggest?

As might be expected by the lot numbers, the number of sales held was well down. A number of auction houses chose not to hold sales. (Or perhaps didn’t have enough properties to offer …. who knows?)

Large sales were held by major players in the market Allsop and Barnard Marcus. Neither had a sale in July which might explain their large listings this month. These two auction houses accounted for over half of the properties offered overall.

Percentages sold strengthen

Percentages sold turned the tables this month. After three months during which it seemed like buyer interest might be softening, with sales rates dropping to 68%, they rose significantly. Around three quarters of all properties offered at auction in August found a buyer. Sales were marginally better at online sales.

Sales rates were pretty strong on an individual basis too. No auction house sold less than 49% of their lots.

An interesting statistic (perhaps) is that the smaller sales tended to boast pretty good sales rates overall. There could be something to be said for the suggestion that when buyers have less choice, or perhaps when there is less competition to push prices up, they are more likely to buy.

No surprise – amount raised down

It will come as no surprise given the low numbers of lots that sales proceeds were well down this month. Just £103m was raised overall at the sales we track. This was just 40-50% of the amount raised in June and July – and only a quarter of the amount raised at the bumper sales in the spring. Around three quarters of this amount was raised at the two largest sales.

Any bargains to be had?

The amount raised per property at auctions this month was around £115,000 – broadly similar to the £113,000 the previous month. After a number of months where the average hovered around £128,000 this might indicate a slight softening in prices.

Interestingly, there was a sizable difference in average prices at live/live streamed and online sales this month. The average price of a property sold at a live auction was just £75,355. On the face of it that looks like there were bargains to be had for buyers who made the effort to attend a physical sale.

Summary

Read the mainstream media and you might get the idea that the property market is collapsing. That prices are falling, properties are going unsold and, in particular, that landlords are rushing to sell up.

In theory that should mean that the property auctions should be super-busy selling distressed lots with prices falling through the floor.

That doesn’t seem to be the case looking at this month’s figures however. They are much the same a normal summer. The numbers of sales held and lot numbers were down but only to the extent that might be expected. Sales rates were strong and prices held up.

Next month should see the auction market get back up to full speed, and so give us a much better indication of market trends. For example in what might turn out to be a record, Allsop have a one day live sale AND two online sales days lined up for late September and almost 500 lots in the catalogue already.

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