Graph 3
Credit crunch
The RIse of RepossessIons aT aucTIon
In The LasT fIVe yeaRs
acceleration
3000 £240
In Graph 3 we can see the rise in the number of 2500 £200
repossessions coming to auction each quarter over the
last 5 years and the increase in the amount of money
2000 £160
raised. In 2004 we were seeing less than 200 lots per
quarter being offered on average, and the increase
in 2005 and 2006 was minimal. However with the
1500 £120
arrival of the credit crunch in Q3 2007 this increase
Total raised (£M)
has accelerated away with Q4 2008 seeing 2665
ed
1000 £80
repossessions being offered. This is over 10 times Q4.
er
ff
The amount raised has dramatically increased with o
Raised
last year seeing in Q4 over £220 million-worth of
500 £40
t
Lots offered
repossessions being sold. This rise has been twofold.
olume moun
Firstly, the number of repossessions has dramatically V 0 0 a
increased from the 8,200 repossessions we saw in
Q4 Q4 Q4 Q4 Q4 Q4
2004 to over 40,000 repossessions in 2008. Lenders
2003 2004 2005 2006 2007 2008
are now placing a higher percentage of repossessions
Quarter
at auction (10.4% in H2 05 and 22.5% in H2 08).
Graph 4
The place to do business
peRcenTage soLd aT aucTIon 1999-2009
100%
With the auction room being seen as a place
95%
where business can be done between motivated
vendors and well funded buyers, I believe
90%
property auctions will continue to play an
increasingly important roll in the disposal of
85%
property. Looking at graph 5 we can see how
80%
the sales rate of auctions for a long period of
time was between 68 and 88 per cent, last year
75%
dipped to a low of under 60 per cent, but has
70%
now climbed back above the 70 per cent mark.
The dip was, I believe, due to a wide difference 65%
of value between vendors setting unrealistic
reserves and purchasers not willing to pay the
60%
price in a changing market. Market forces,
55%
together with auctioneers being selective have
resolved this. The sales rates, which have been in
50%
excess of 70 per cent for the last three months, Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
indicate there are buyers out there keen for 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
properly priced stock. I see this trend continuing.
Graph 5
300 per cent growth
VoLuMe of ResIdenTIaL aucTIon saLes as a peRcenTage
of aLL saLes RecoRded by The Land RegIsTRy
Graph 4 shows the relative growth of residential
5.0%
auction sales against all sales recorded at Land
4.5%
Registry. We can see that for 2004, 2005, 2006 and
the first part of 2007 approximately 1.5 per cent of
4.0%
all residential transactions took place in the auction 3.5%
room. As mentioned before, however, with the change
in market conditions in Q3 2007 the relative success
3.0%
of auction in disposing of property has increased so 2.5%
much that now almost five per cent of all residential
2.0%
property transactions take place in the auction room.
This is a growth of over 300 per cent. 1.5%
Next month we will look at how estate agents can
t
age 1.0%
become involved in auctioning property. cen
0.5%
David Sandeman is Managing Director of the
p
er
0.0%
Essential Information Group. Founded in 1990, EIG
Q4 Q4 Q4 Q4 Q4 Q4
covers every auction in the UK and has a fully
2003 2004 2005 2006 2007 2008
searchable database.
Quarter
For further information email:
davids@eigroup.co.uk
PROPERTYdrum june 2009 63
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76