Auction Homes Sell for 40% Below Market ValueMake Text Bigger
Home prices at auction sales are almost 40% less than average property prices reported by major mortgage lenders.
November figures for homes under the hammer show the average price of the 1,098 homes sold under the hammer was £103,477 – up 1.12% on the £102,322 average 12 months ago.
Average house prices for November were reported as £165,798 by the Nationwide and £161,731 by the Halifax.
The auction figures are 37.6% below market value of the Nationwide average home price and 36.1% below market value compared with the Halifax figures.
Year-on-year auction property prices are falling at about the same rate as traditional sales direct to buyers. The Halifax index showed a 1% drop, while the Nationwide reported a decrease of 1.6%.
“While the media are reporting a decline in the number of house sales, last month saw a 10.4% overall increase in lots sold at auction very close to the rolling year increase of 9.6%,” said EI Group director David Sandeman.
“In addition, the residential increase for the rolling year has been 10.1%. The overall percentage sold was 63.9% which was down from the rolling year average of 73.2%, but up on October 2010 which was 59.1%. The gradual improvement in the results that we have seen for the majority of months this year continues.”
Auctioneers are claiming properties under the hammer offer investors better value for money as repossessed properties continue to make up a high proportion of lots offered.
Roger Lake, director of Auction House, said: “There seems to have been a surge of interest in auction properties – with high viewing levels, record attendances at sales, and a large percentage of our buyers wanting to live in the houses, rather than sell them on.”
At the firm’s recent sale in West Yorkshire, repossessed homes made up one in five of the lots on offer.
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