Fewer buyers are turning to auction properties, despite an uplift in the number of sellers looking to utilise auctions as a route to help sell quickly, research by House Buyer Bureau has revealed.
House Buyer Bureau analysed the current auction market landscape looking at both the level of for sale stock heading to auction and the appetite amongst buyers based on the proportion of stock that has sold subject to contract.
The research showed that in a cooling market, more sellers were heading to auction in an attempt to sell swiftly before house prices decline any further, although homes sold at auction remained a relatively small percentage of the total for sale stock.
Currently, 2.3% of all homes on the market across Great Britain were found to be heading to auction.
This marked a 0.6% increase when compared with this time last year, equating to an increase of almost 6,000 homes.
The North East ranked as the nation’s auction hotspot, where 5.6% of all homes listed for sale were via property auctions; the region also saw the largest annual increase at almost 1%.
The North West (2.9%), Wales (2.8%) and the East Midlands (2.8%) were home to some of the largest proportions of for sale stock opting to sell at auction.
However, the House Buyer Bureau found a reduction in buyer appetites.
Currently, 29.7% of all homes heading to auction were sold subject to contract, a 5.7% reduction when compared with this time last year, when more than 35% were selling.
Scotland saw the largest reduction in buyer appetites for auction property purchases, down 13.1% annually, with the North West (-12.1%) and West Midlands (-10.9%) also seeing double-digit reductions.
Just one region saw auction buyer demand levels increase: the South East, with a 6.7% uplift.
Chris Hodgkinson, managing director of House Buyer Bureau, said: “What we’re currently seeing with respect to auction property sales is far fewer interested parties than previously.
“This naturally means fewer bidders, with properties achieving less when the hammer does fall compared to this time last year.
“The profile of the auction buyer has also changed due to heightened levels of market uncertainty and increasing mortgage rates, with a reduction in the number of less experienced, mortgage-backed bidders.
“While the more experienced cash buyers have remained, what these figures don’t highlight is the higher level of homes that fail to even make the auction room due to a lack of interest.”
He added: “The current challenge facing sellers is that should their property fail to sell, this could further deter potential buyers, or at best, cause them to come in with an even lower offer.
“With the current outlook unlikely to change anytime soon, we expect the auction market will remain fairly subdued over the mid-term, at the very least.”
