Vendors need to be realistic about pricing, say Auction House

Despite a record number of sales in 2022, UK auctioneer, Auction House, predicts that the months ahead will see challenges across the UK property market as a whole and warns that vendors need to factor these in when taking their property to auction.

Related topics:  Auctions
Property Reporter
12th January 2023

The firm reported a record number of sales in 2022 (4,132 compared to 3,606 in 2021) – and is the first time the network has broken through the 4,000-lot threshold in the group’s 16-year history. The total money raised by the auctions last year has also risen accordingly – up 4% (£24.5m), to £630,683,784.

Managing Director Jeremy Prior put the increased figures down to the unique structure of the Auction House network of branches and their regional teams finding favour with both buyers and sellers alike.

He said: “We really are bucking the trend in the market at the moment. Our 80% success rate for the year sits way above the 30-40% mark that some of our competitors have been recording for sales in recent months.

“We put this down to our network of regional offices, all with auctioneers and staff who are knowledgeable and experienced within their local markets, selling properties that are close to home – often to local buyers - at the very best prices.

“We also offer three different methods of sale: in the room, via livestream, or online through an eBay-style national auction every week – a method which is certainly gaining in popularity. All in all, it’s a sales model that makes us stand out from the purely national operators out there, and it clearly works!”

However, Jeremy adds a note of caution as he looked ahead to 2023: “Anyone who tells you that the property market is going great guns simply doesn’t understand the property market. Demand from buyers unquestionably declined in the final quarter of last year, which is a direct reflection of the general economy. We’ve seen price falls of between 10 and 15 per cent over the last six months and would expect them to remain that way going forward into the first half of 2023.

“Similarly, interest rates have been on the rise and are likely to rise again in the first quarter of this year. So, things are pretty tough out there, and they’re likely to stay that way until July at least. This means that vendors will have to be realistic over their guide prices, helped by our team of auctioneers who each know their respective local markets like the backs of their hands.

“But there’s hope on the horizon. The Prime Minister has already made a reduction in inflation one of his five key targets for 2023, and we would expect interest rates to start levelling off at a similar time. So, we’re predicting a tough first six months or so, and then a gradual improvement in levels of business in the second half of the year.

“As far as prices are concerned, the beauty of an auction is that properties going under the hammer instantly find their market level. Of course, global events – including the war in Ukraine – make the future very difficult to predict, but we are certainly finding that more and more vendors are using the auction process for speed and certainty of sale.

Jeremy concludes: “The truth is - nobody else sells the sheer number of properties that we do, and last year we successfully sold four out of every five properties we offered. With the right helping of pragmatism and realism from our vendors, we have every reason to believe that 2023 will be just as successful.”

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