House prices reach record high: Why now could be the right time to sell a property at auction
House prices in the UK are approaching record levels, according to recent reports, which is helping create a favourable market for property owners considering selling. With increasing demand and a shortage of homes, many sellers are turning to property auctions to maximise returns.
A big part of an auction’s appeal is that it offers a faster and often more profitable sale process. With house prices now peaking, selling at auction could be the best way to secure a quick and competitive sale.
Current market conditions
The UK housing market has recently experienced rapid growth, with house prices rising steadily due to a combination of factors such as low interest rates, government incentives for first-time buyers, and a shortage of available properties.
For homeowners, this surge presents an excellent opportunity to sell property at auction while the market is strong. However, the future is uncertain with rising inflation, potential interest rate hikes and economic shifts, potentially cooling the market soon. This means sellers looking to benefit from current conditions should act sooner rather than later.
Why auctions are becoming more popular
Selling a property at auction has gained popularity for several reasons, with the speed of the process being one of the biggest draws. Traditional house sales can take months to complete, but an auction sale is typically finalised within 28 days. For those who need to sell quickly, this is obviously an ideal timeline.
Another benefit is the transparency of the process. All bids are made publicly, ensuring fairness while eliminating drawn out negotiations. Once the auction hammer falls, the sale is legally binding, and the buyer must complete the transaction within the agreed period. This certainty is appealing to sellers who want to avoid the risks of a buyer pulling out at the last minute, which is a common occurrence in traditional sales.
Auctions also attract a wide range of buyers, from developers to investors and those looking for unique properties. With multiple parties bidding, there is the potential for the final price to exceed expectations, particularly in a market where demand outstrips supply.
Which properties perform well at auction?
While almost any property can be sold at auction, certain types are especially well suited to this method. Properties in need of renovation or repair like this three bedroom semi detached house in Wembley tend to attract developers and investors, with such buyers often looking for opportunities to add value through refurbishment or redevelopment.
Unique or unusual properties also do well at auction. Homes with distinctive features, like period properties or those with development potential, often stand out in the competitive environment of an auction. Buyers interested in something special are more likely to engage in a bidding war, driving up the sale price.
Probate properties, those sold after the owner’s death, are also frequently sold at auction. The speed and simplicity of the auction process make it attractive to executors who need to settle estates quickly. Given the current high demand for homes, even probate properties in less-than-perfect condition are likely to generate interest from buyers eager to invest.
Managing risks and expectations
Although selling at auction offers many advantages, there are some risks involved. The biggest concern for sellers is that the property might not meet its reserve price, which is the minimum amount the seller is willing to accept. If bidding does not reach this level, the property remains unsold, so setting a realistic reserve price is essential to minimise this risk.
Properties also need to be advertised effectively to reach the right buyers, with experienced auctioneers like Auction House London able to market properties effectively, across various digital platforms and an extensive customer database, generating interest is easy.
Sellers should also be prepared for the quick pace of the auction process. Once a property is sold, the buyer is expected to complete the purchase within a month. For sellers not ready to move or who require time to finalise their next steps, this rapid timeline may pose a challenge.
Maximising the current market
Given the current high property prices, now is a great time for sellers to consider auctions. Properties that might not have performed well in a less competitive market can now generate strong interest due to limited housing stock. Auctions provide a way to capitalise on this demand quickly, with less risk of delays or complications that often occur in private sales.
Moreover, selling at auction allows sellers to control the minimum price they will accept, ensuring that they do not undersell their property. The competitive nature of bidding can often lead to a higher-than-expected sale price, especially for properties that stand out.
Auction House London prides itself on not just meeting but exceeding our customers’ expectations for their property buying or selling experience, so if you have any questions about selling a property while prices are high, please contact our team of auction professionals. If you’re looking to buy property, you can browse through the lots listed in our forthcoming auction. Or, if you have a property you want to sell, why not see how much it could be worth in an auction with a free valuation by Auction House London.