Per cent sold
At the height of the property boom in 2006 / 2007 the sale rate was up to around 80 per cent, but the market correction in 2008 saw a sudden decline in sales and the average rate dropped to less than 70 per cent. Consequently auctioneers quickly adapted to the changing market conditions and became more circumspect about which instructions to
PER CENT SOLD IN Q1
80% 75% 70% 65% 60%
accept, whilst vendors recognised that reserves would need to be revised downwards in order to secure a sale. As a result auction sale rates have improved, and for three years running
the rate has hovered at around 75 per cent which is comparable to the long-term average.
PER CENT SOLD IN Q1 - ANNUAL % CHANGE
20% 15% 10% 5% 0% -5% -10% -15%
2008 2009 A stable picture for three years. Amount raised
In line with the other metrics measured the amount raised for residential property at auction rose steadily throughout the noughties, reaching a peak in 2007. The subsequent market correction resulted in sharp falls in the amount raised in both 2008 and 2009 (19 per cent and 27 per cent
Millions
£700 £600 £500 £400 £300
TOTAL RAISED IN Q1
respectively), as property prices decreased and the volume of auction stock being offered and sold declined. The market has since stabilised, and Q1 2012 shows an encouraging increase in auction receipts of over 9 per cent to £538m.
TOTAL RAISED IN Q1 - ANNUAL % CHANGE
20% 10% 0%
2008 2009 The best first quarter since 2008! Conclusion
The graphs show that auctions did endure a tough period in the fallout from the recession that started in 2008, however the level of decline was much smaller than that seen in the wider, open market. Land Registry figures show that property sales in 2009 were 49 per cent down on transactions recorded in 2008 – far exceeding the 12 per cent drop seen in the auction market over the same period.
Since then the property auction market has
stabilised, and the positive results recorded in Q1 2012 are very encouraging and point towards a growing and confident market. Certainly the auction rooms that I attended in March were full of activity with lots of competitive bidding, and one hopes that this continues through the remainder of 2012.
2010 2011 2012
-10% -20% -30%
2010 2011 2012 2008 2009 2010 Little change in this year’s first quarter. 2011 2012
2008
2009
2010 And receipts are definitely improving too. Regional review
Lots offered in London and the South East fell by nearly 15 per cent and 13 per cent respectively in Q1. This is in stark contrast to Northern England, where the North West recorded a 36 per cent jump in lots offered to over 1,300 in the quarter, and the North East was up by 18 per cent. As reported in the overall market analysis the
volume of lots sold in Q1 2012 rose significantly on Q1 2011. Huge increases were seen in the North East, up from 336 lots sold in Q1 2011 to 545 in Q1 2012 – a 62 per cent hike. Similarly the North West saw 953 auction sales recorded – up over 42 per cent on the same period last year. These areas have witnessed several new auction houses appear over the last 12 months, many of which have adopted the increasingly popular ‘conditional’ sale method.
The sale rates across the regions were largely up on 2011, with only South West and East Anglia reporting on slight falls (down 3.6 per cent and 1.5 per cent respectively). London and the Home Counties still enjoy the highest success rates in the UK, with 4 out of 5 lots being offered going on to sell. Pleasingly every single region shows a sale rate in excess of 70 per cent. The total raised for residential property at auction increased in every region apart from East Anglia (down 26 per cent) and Wales (down 9.3 per cent). Unsurprisingly London and the Home Counties recorded the greatest overall value of auction receipts, with over half of the total amount raised being generated from lots in these areas. Meanwhile the North East region increased emphatically by over 76 per cent to £43m raised in the quarter alone.
PROPERTYdrum MAY 2012 63
2011
2012
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