"House prices 25% cheaper at auction"
The average cost of a home bought at auction is 25% below market value, according to new research. The same figures relased in June appeared to be at 32%.
The latest Land Registry average price of a home in England and Wales for June is £161,479, compared with the average cost of a residential auction lot going under the hammer for the same month as £121,394.
Figures collated from all residential property auction sales in England and Wales for the three months ending June 30 by the Essential Information Group disclose 4,587 lots were sold for £556.8 million.
In Scotland, 74 out of 131 lots were sold for £3.67 million.
For the UK, the number of homes going to auction was up year-on-year by 8.7% to 6,507, although the number of lots sold was up 21.3%.
Around 72% of all homes put in to a sale were bought – up 17.6% on the previous year.
“The trend we have seen emerging over the past few months continues with a strong set of figures below,” said David Sandeman of the Essential Information Group
“While reports coming from the private market are that the market is slowing and many properties are remaining unsold, the auction market is bucking the trend with increasing number of lots selling.”
Although homes are selling an average 25% below market value at auction, the market is continuing to grow, as quarterly comparisons show.
“Overall we have seen double digit growth in lots sold, percentage sold and total raised,” said Sandeman. “Broadly similar numbers are coming through in the quarterly comparisons, with the yearly figures seeing a 6% increase in lots sold and a small decline in amount raised.”
Meanwhile, according to the Land Registry, house prices in England and Wales stood still from May to June with an average year-on-year house price drop of 2.5%.
The figures line-up with most other house prices surveys which broadly show the rate of house price falls is still slowly dropping and will bottom out some time over the next few months.