Homes at auction 20% cheaper than average

Homes selling at auction in May sold for around 80% of the price of an average home.

The latest figures from auction monitor EI Group show 2,034 properties changed hands for an average price of £128,466 in May 2012.

The price is just 80% of the average house price in England and Wales of £160,417, according to the latest official figures for house sales in April from the Land Registry.

The gap between homes sold at auction compared to those sold privately has narrowed over the past 12 months.

In May 2011, a home sold at auction had an average value of £139,957, compared to a Land Registry average home value of £161,823.

Now, homes under the hammer are selling for 8.9% below their May 2011 values, while Land Registry average home values have dropped just 1% in the same period.

EI Group managing director David Sandeman is bullish about prices of homes sold at auction for the rest of this year.

“Lots offered and sold in the month were both up on last year (by 7.3% and 8% respectively), whilst larger increases are evident in the rolling quarter and year,” he said.

“The residential property auction market once again produced a strong set of results, with positive gains seen in every metric measured. The volume of lots sold increased notably; by 8.9%, 10% and 11.4% in the month, quarter and year respectively, whilst total receipts from residential lots also recorded sizeable increases on 2011.

“This is in contrast to the commercial market, which continues to experience challenging times. While the number of lots offered has risen, the lots sold and percent sold have dropped slightly. The fall in the amount raised is perhaps indicative of the lower average lot sizes.”

View the full report for residential and commercial property.