UK property auctioneer, Auction House, has reported its best-ever first quarter of the year, despite a steady succession of interest rate raises being announced by the Bank of England throughout the period.
Between January and March, the firm sold a record 892 properties from 1063 offered – a success rate of 83.9% and raising a total of £137,849,799. This marks a 6.5% increase in the number of sales from its previous best-ever first quarter last year, when the group sold 838 lots from 1042 offered (a success rate of 80.4% and raising £132,683,102 in the process).
Jeremy Prior, Auction House managing director, comments: “This is another remarkable set of figures from Auction House – especially considering the wider economic position the market was facing at the time. Since December, we’ve had three consecutive rises in the Bank of England base rate – from just 0.1% in December last year to a more substantial 0.75% now, taking it back to pre-Covid levels.
“These moves were mainly in response to a soaring UK inflation rate, which rose to 6.2% in the year to February 2022, up from 5.5% the month before. Many forecasters now believe that inflation could peak at a level higher than the 8% previously predicted.
“Ordinarily in such circumstances, you would expect higher interest rates to encourage people to save more because they get a higher return, and borrow less because it‘s expensive – especially for those on variable rate mortgage deals, of course.
“And yet this year, these interest rate increases don’t seem to have been affecting buyer demand, which has remained strong throughout. This may have been the first back-to-back increase since 2004, but it was also our best-ever first quarter and our best-ever March too.”
Compared to pre-pandemic figures, this year’s successes are even more marked. In March 2019, Auction House sold 261 properties, whilst in March 2022 the group sold 400 – an increase of more than 50% (52.3%). There was also a 14% increase in the number of lots sold in the first quarter of 2019 (781) compared with the first quarter of 2022 (892).
Jeremy concludes: “These figures only go to show the astonishing resilience of the auctions market. Even with Russia’s invasion of Ukraine, interest rates and mortgages both going up, and huge uncertainty over how we live with Covid, people continue to gravitate towards bricks and mortar.
“Even if continuing inflation means that we should expect to see further interest rate rises this year – perhaps as soon as the next meeting of the Bank of England Monetary Policy Committee meeting on 5 May. Nevertheless, we firmly believe the market will continue its robust stance, as it has during the first three months of the year.”