Why are sellers putting their properties to auction?
The number of residential property lots coming to the auction market increased by 51.5% year on year in August, according to online property specialists My Auction.
The surge in number, My Auction said, comes as sellers look for a quicker way to sell their properties, with more security and certainty that the sale will go through, given the current uncertainty in the market.
Latest data from EIG Property Auctions also showed that the number of residential lots sold year on year has gone up by 39.7%, with the total raised increasing by 29.4%.
In addition, My Auction noted a substantial uplift in call volumes from sellers, both directly, and as part of its network of independent estate agents across the UK, and from homeowners since schools went back at the beginning of September.
Zoopla data indicated that the number of housing sales expected to complete this year is on track to be 21% down on 2022 and the lowest number of sales since 2012.
According to My Auction, a big reason for the stagnant market is that sellers’ expectations have not adjusted quickly enough to the current market conditions, with many pricing their properties too high to attract buyers.
“We’ve seen a huge increase in enquiries from sellers, all keen to secure a sale on an existing property already on the market,” Stuart Collar-Brown (pictured), founder and director of My Auction, said. “There is a noticeable shift in the market with an increased urgency from sellers who want the security a sale by auction brings.
“These sellers are looking to property auctions for security and certainty in the current and unpredictable market. With more rate rises expected and Christmas fast approaching, taking the auction route is becoming far more popular than we have seen in the last three to four years.”
Collar-Brown added that sellers must also consider what the market is telling them in the run up to the auction.
“The harsh reality of the current market is that if the market deems the price to be too high within the first seven to 10 days of marketing, sellers must accept the market conditions, re-adjust, and go again,” he continued.
“If there are buyers willing to pay on or close to the guide price on a property but offer the guarantee of an immediate exchange of contracts with a non-refundable 10% deposit, sellers should seriously be considering taking these offers. If they don’t take it now, in three months’ time, they could be 10% or more less, based on what we are seeing from buyers right now.”
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