2014 was an exceptionally strong year of growth for the property auction market and impressive regionalised performance has ensured a positive start to 2015.
The sustained demand we’re experiencing suggests that there are still many people looking to explore, and indeed take advantage of, short-term financing facilities which allow them to secure properties which many traditional lenders would be unable to offer a mortgage on. Whether they are landlords looking to purchase properties on a buy-to-let basis, first-time buyers entering the residential investment property market or businesses looking to expand office and commercial space, people are looking for efficient and common-sense solutions when it comes to financing a property purchase.
Our latest lending figures clearly show that demand is persisting into 2015. In the period from January to the end of April, Auction Finance saw the total funding it provided across the UK rise 13.8 per cent compared to the same period in 2014. At the same time, the number of auction property purchases we helped to facilitate rose by 19.5 per cent.
If we drill down a little further into the regional trends underpinning this growth, an interesting picture emerges. The levels of funding we have provided in the East Midlands has skyrocketed 258 per cent from last year’s figures. The volume of customers we provided short-term finance to in this region has also increased notably by 70 per cent . Likewise, we have seen tremendous growth in the North West where the sum of short-term funds we have provided has risen by 133 per cent with the number of clients serviced also up 93 per cent.
These remarkable funding figures, as you might expect, fit into an encouraging wider context. The Essential Information Group (EIG) has produced findings for the first quarter of 2015 which reflect this rise in demand for auction property across both East Midlands and the North West . They report that the value of East-Midlands property bought at auction in the first quarter of 2015 was up 8.9 per cent on the previous year. Lots sold also increased by 7.8 per cent. For the North West, EIG figures show a 4.4 per cent increase in value of property sold at auction and an increase of 1.25 per cent in volume of lots sold.
The rise in demand for auction property, and consequently specialist short-term funding to help secure and finance that property, has been most pronounced in the East Midlands and North West. Certainly, these regions are acting as key drivers in the promising UK-wide figures Auction Finance is experiencing.
It would be wrong, however, to attribute the buoyancy of the auction finance market in 2015 solely to demand in these regions. North of the border in Scotland funding levels have inflated considerably by 198 per cent with a 117 per cent increase in the number of deals completed . More measured, but nonetheless important, funding-value growth of 55 per cent in the North East, 20 per cent in the South East and 19 per cent in Yorkshire and the Humber , has also made a notable contribution to 2015’s promising outlook so far.
The East Midlands, North West and Scotland may be spearheading the growth in appetite for short-term funding we are experiencing presently, providing the headline numbers as they do so. However, the presence of more measured increases in demand across many other regions of the country should not be underestimated in importance.
Taken together, these statistics offer tremendous encouragement as we look forward to the remainder of 2015.
