The latest figures from EI Group show the volume of lots offered at auction in June increased marginally to 2,902 (up 1.2%), whilst lots sold increased by 4.6% to 2,177.
The industry sale rate remains comparative to the long-term average - hovering in the mid-late seventies as it has been for almost a year now.
David Sandeman, managing director at EI Group commented:
"The market continues to make huge gains in auction revenues, as the figures below show a 22.5% rise on June 2013 to £292.5M. It is also the fifth month running in which property auctions have seen double-digit rises in the monthly, quarterly and yearly comparisons for total raised - a startling trend and one that is indicative of the increased buying activity and rising house prices that has been widely reported in the open market in recent times.
I have just published a half-year auction market review which takes an in-depth look at the industry and how it has fared over the last 10 years"
Lots offered at UK property auctions in H1 increased by 4.2% to 16,566 lots. This reverses the trend seen last year when the market experienced a slight dip in auction instructions (-0.7%), following three consecutive year-on-year increases.
In comparison to the wider, open market, property auction sales rose steadily throughout the noughties culminating in a peak during H1 2007 when 14,107 lots sold. Following the market crash in late 2007 / early 2008, auction activity diminished markedly and Figure 1 shows that auction sales bottomed out in H1 2010 when 9,557 lots sold – a 32% fall on the peak seen 3 years earlier.
Although fairly substantial, this decline was still dwarfed by the falls recorded by the Land Registry in the open market, where sales fell by over 51% in the same period.
The auction market has since recovered well, highlighted by four consecutive years of growth. In fact, with the exception of H1 2007, the 12,894 lots sold in H1 2014 is the highest number ever recorded. Furthermore, residential auction transactions are only 6% down on the H1 2007 peak in comparison to the 30% gulf seen in residential transactions recorded by the Land Registry.
Following the property boom in 2007 and the subsequent large declines experienced during the crash of 2008 – 2009, the industry has since recovered well as figures show 4 years of modest but steady growth. The residential market has been particularly strong over the last 12-18 months, with packed auction rooms and increasing numbers of lots selling far in excess of their guide price. Over 10,500 residential lots sold in H1 2014 – only 5% short of the record number of sales witnessed in H1 2007 (14,107). In contrast, commercial sales totalled 2,365 in H1 2014 – 20% short of the 2,955 lots sold in H1 2007.
Auction revenues, which peaked in H1 2007 at just over £3bn, had more than halved just 2 years later (£1.39bn in H1 2009) as a result of falling property prices and a reduction in the number of buyers in the marketplace. Following two years of moderate increases (7.8% and 7.4% in H1 2012 and H1 2013 respectively), auction data for H1 2014 shows a significant gain of over 20% in this regard to £2bn. It will be interesting to view the year-end figures in 6 months’ time to see if this rate of growth can be sustained.
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