The size of the UK property auction house market hit the highest point in a decade in 2022, approaching £0.5bn in revenue, the latest research from Moverly has revealed.
Moverly analysed the annual revenue of the property auction house sector since 2013, and found that in 2022, the sector generated total revenue of £409.3m.
This was the largest profit in a decade, and represented growth of almost 30% since 2013, when revenue totalled £316.4m.
Despite this 10-year growth, the decade’s data shows that the property auction sector was struggling to gain traction for a long time, shrinking in size every year between 2017 and 2021 when revenue hit a low of £251.3m.
When the pandemic hit, it initially exacerbated market decline with unusually high buyer demand meaning that sellers were less likely to turn to the auction house, because selling on the open market was reliable and more profitable.
This caused two consecutive years of double-digit decline in 2020 and 2021.
But high demand started to cause a backlog in the housing market, particularly through the conveyancing process, where timelines began stretching beyond six months.
The property auction sector went from years of decline to recording annual growth of 62.9% between 2021 and 2022.
From this peak, the economic turmoil of 2023 has led to a cooling housing market.
As such, Moverly forecast that by the end of this year, the auction market revenue would record a marginal annual decline of 5.3%.
However, this would result in annual revenue of £387.7m, still the second highest 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.”
He added: “It’s clear that Home Information Packs (HIPs) would have been a massive help in reducing this backlog.
“By providing sellers with up front information about the property, they don’t need to go searching for that information themselves, which means they don’t have to wait for an available surveyor, for example, which expedites the conveyancing and prevents many sellers from resorting to an auction sale.”
