The growing demand for property auctions
1 November 2023
More and more people are choosing auctions to buy and sell property. Recent research shows that during the past year, the number of properties coming to auction in Britain has risen by 11.3%, up from 13,854 lots in 2021/22 to 15,424 in 2022/23.
Moverly has analysed the yearly revenue of the property auction sector since 2013 to gain an understanding how the market has developed since 2013. The data reveals that in 2022, the sector generated a total revenue of £409.3m. This represented an increase of almost 30% since 2013, when revenue totalled £316.4m.
Speed of sale and quick closure
One of the principal reasons why both buyers and sellers are opting to use property auctions is because of the speed of sale. Compared to conventional methods of buying and selling property, whereby transactions can often drag on for months, with auctions, closure is achieved within much quicker timescales.
With property auctions, successful bidders typically complete their purchase within 28 days of auction.
Timeframes are fixed from the start, so everyone involved in the transaction knows exactly how long it will take to complete. For investors and landlords, quicker completion can mean literally mean the difference between earning a monthly income or missing out.
Moverly’s research confirms that the speed of transaction is the leading reason why sellers are increasingly turning to property auctions.
When the pandemic hit, the sector suffered a decline in 2020 and 2021, caused, predominantly, by an unusually high buyer demand, which led to sellers being less likely to use property auctions because the open market was seen as more profitable. However, this changed when the high demand began to cause a backlog in the housing market. As such the property auction market went from decline to recording annual growth. Between 2021 and 2022, annual growth stood at 62.9%, as sellers began to opt for the faster process of property auctions, rather than waiting for the slow conveyancing processes on the open market.
Moverly forecasts that by the end of 2023, auction market revenue will be at around £387.7m, the second highest annual rate in the last decade.
Ed Molyneux, co-founder of Moverly, said: “A severe bottleneck in the buying process, caused by surging buyer demand during the pandemic, forced many sellers to the auction house in 2022.
“This is far from an ideal path to selling as it often means accepting a lower price than would be expected on the open market, not to mention the uncertainty over just what that price will be.
“The bottleneck was almost entirely caused by delays in the conveyancing process which simply couldn’t handle the demand.
Of course, there are many other benefits to using property auctions, other than the speed of transaction.
Higher completion rates
Buyers can benefit from higher completion rates. Once the hammer lands, the property belongs to the highest bidder. Unlike on the open market, nobody can backpedal on the deal or gazump. As there are no chains involved, the sale is not at risk of collapsing, and the process tends to be significantly less stressful and uncertain than the traditional estate agent method. Additionally, there is less likely to be hidden ‘surprises,’ and the whole process is much more transparent.
For sellers, reputable property auctioneers like Auction House London run comprehensive marketing campaigns, to put lots in front of as many eyes as possible. Auction House London understands that to get the most out of the properties we have listed, an auction catalogue alone is not sufficient. As such, we carry out extensive marketing campaigns, including sending hard and online version of a catalogue to a database of over 100,000 registered buyers. Additionally, we generate auction boards to create local interest. Many of the properties on our books feature in regular adverts in the Estates Gazette, and in the wider trade press.
If you want to be one of the growing number of people using property auctions to sell a home to ensure for a faster, more seamless transaction, why not get your property valued for free by Auction House London? Or, if you are looking for a property, either to live in or as investment to let out and benefit from getting the keys in your hands sooner rather than later, then why not register to bid in our forthcoming property auction. We have a fantastic range of properties listed in our next auction.
If you would like to discuss the possibility of selling or buying a property at auction, please contact our friendly team of property auction professionals.
Moverly research source.
Written by Jamie Royston
1 November 2023
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