Auction homes sell for 37% less than average house prices

Auction homes sell for 37% less than average house prices

14:29 PM, 18th May 2012, About 12 years ago 2

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Homes going under the hammer at auctions are going up in value, but are still significantly below average house prices.

April figures for homes sold at auction show 1,479 properties were sold for an average price of £101,060, according to auction monitor EI Group.

That’s around 37% below the average house price in England and Wales of £160,372, reported in March in the latest official figures from the Land Registry.

The values of auction homes against other homes has narrowed over the past 12 months.

In April 2011, the average price of a home sold at auction was £96,239 compared to a Land Registry figure of £163,083 for an average home.

While prices of homes at auction have increased by 3.8%, the Land Registry average home values have dropped 1% in the same period.

Commenting on the figures, EI Group managing director David Sandeman is bullish about auction prospects for the year.

“Results show a slight dip in the overall sale rate to 69.4% when compared to the rates achieved in recent months; however it is still up on the 67.2% seen in April 2011,” he said.

“Sale rates achieved in the rolling quarter and year have also risen, whilst the total value of lots sold in UK auction rooms continues to increase.”

Sandeman also explained that auction levels are rising on the back of residential property sales.

“The volume of lots offered and sold at auction in April rose by 12.4% and 16.1% respectively, whilst the total value also increased by nearly 12% to over £179 million,” said Sandeman.

“These substantial gains were largely due to the on-going success of the residential market, with this being the third consecutive month to record an increase in every measurable parameter. Residential lots sold show double-digit increases in all three comparable periods, whilst the total raised jumped from £118 million in April 2011 to nearly £150 million in April 2012 – a remarkable 26.7% rise.”

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11:39 AM, 21st May 2012, About 12 years ago

But what does this mean?

Is it that auction propertiess are a good buy, or that it is the cheaper properties that are coming up for auction?

Neil Patterson

9:54 AM, 22nd May 2012, About 12 years ago

The average value of auction property will be reduced by a greater number of properties that require work and also bank repossessions that have to go to auction to prove they were sold at open market value.
Properties may also go to auction because they are a distressed sale or a quick sale is required accepting that this may reduce the price obtained. Hence could be bought at a bargain price.

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