Home auction market sees more sellers but fewer buyers

Home auction market sees more sellers but fewer buyers

0:02 AM, 26th October 2023, About 6 months ago 1

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More homeowners are turning to auctions to sell their properties quickly in a slowing housing market, but they may face lower demand from buyers, research reveals.

According to a report by House Buyer Bureau, 2.3% of all homes on the market are heading to auction, up from 1.7% a year ago.

This means that almost 6,000 more homes are being sold via auctions than last year.

However, not all regions are seeing the same level of activity.

The North East is the nation’s auction hotspot, with 5.6% of all homes for sale going to auction, followed by the North West (2.9%), Wales (2.8%) and the East Midlands (2.8%).

‘Fewer interested parties than previously’

Chris Hodgkinson, the firm’s managing director, said: “What we’re currently seeing with respect to auction property sales is far fewer interested parties than previously.

“This naturally means fewer bidders, with properties achieving less when the hammer does fall compared to this time last year.

“The profile of the auction buyer has also changed due to heightened levels of market uncertainty and increasing mortgage rates, with a reduction in the number of less experienced, mortgage-backed bidders.”

He adds: “While the more experienced cash buyers have remained, what these figures don’t highlight is the higher level of homes that fail to even make the auction room due to a lack of interest.”

Demand for auction properties seems to have cooled down

However, demand for auction properties seems to have cooled down with 30% of all homes heading to auction having been sold subject to contract, down from 35% a year ago.

This suggests that buyers are less willing to take a chance on auction properties, which may have lower quality or higher risk than other homes on the market.

The report also revealed regional variations in buyer appetite with Scotland seeing the biggest drop in auction sales, down by 13.1% year-on-year, followed by the North West (-12.1%) and the West Midlands (-10.9%).

The only region that saw an increase in auction sales was the South East, up by 6.7%.


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Comments

Morag

11:43 AM, 26th October 2023, About 6 months ago

I live in Scotland, and occasionally look at auction properties, but I've noticed that the auction house buyer fees have jumped ridiculously from 1 or 2 percent to 4 percent, subject to a minimum charge around £6k, vastly reducing any margin for profit in refurbishing the cheapest properties, not to mention the Additional Dwelling Supplement of 6 percent on top. I can't speak for others, but to me that's a total deterrent to considering an auction property.

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