Data shows property auctions were bustling in August

Fresh data shows an uptick in activity in property auctions, as more people look to purchase property under the hammer.

Auction data company, Essential Information Group (EIG) has released data showing that in August 2023 it appears as though more landlord-investors, businesses, and those looking for a home, are turning to auctions in order to secure a property.

Property-related business tends to be slower around August, as many people are typically on holiday.

Significant rise in properties put into an auction

However, data from EIG shows that there was a 47.9 percent increase in lots offered (1773) in August 2023, compared to the same month one year prior (1199), for commercial and residential properties.

In that period, the number of residential lots offered increased by 51.5 percent (from 1072 to 1624 lots), whilst commercial lots offered increased by 17.3 percent (127 to 149 lots).

These upticks in lots offered in both property categories suggest there may be an increase in sellers who are very keen to sell, and so they may be comfortable trading flexibility in asking price in exchange for a quick sale, by taking the auction route.

Properties sold at auction

Lots sold (as opposed to lots offered) also saw an overall increase year-on-year, implying that whilst availability of auction properties increased, there was also the demand for them.

There were 38.8 percent more lots sold in August 2023 when compared to the same month one year prior (814 to 1130 lots). Residential lots sold in August increased by 39.7 percent (749 to 1046 lots), whilst commercial lot sales increased by 29.2 percent (65 to 84 lots).

These figures suggest that currently there is more of a bustling auction market within the UK, with increasing numbers of sellers and buyers alike turning to auctions in order to transact property.

However, the data does suggest that it may still be a buyer’s market and that sellers may need to go further to achieve a sale.

In August 2023, the percentage of lots offered that sold fell by 6.2 percent (from 67.9 percent to 63.7 percent) on the August 2022 figure.

Interestingly though, this overall fall in the percentage of lots offered that sold was driven by a 7.9 percent drop in residential lots (from 69.9 percent to 63.7 percent); the proportion of commercial lots that were offered that sold in August 2023 increased by 10.2 percent (from 51.2 percent to 56.4 percent). This would imply that those in the residential space unwilling to flex on price are greater in number than those selling commercial property.

How can landlords take advantage of this trend?

Whilst buy to let mortgage rates have risen significantly as a result of changes in the Base Rate, bridging loan rates have remained at a competitive low.

Buying property at below market value and making improvements to it, could offer landlord investors a path to better yields, when exiting to long term finance, or the opportunity to flip property at a profit – so long as the numbers add up when expecting a realistic sale price.

There is also the opportunity to take what was a family home and use it as a higher-yielding House of Multiple Occupation.

Commercial Trust can help with auction finance

If you are thinking of bidding on properties at auction our team of expert auction finance brokers can line up finance ahead of the sale day, so you can bid with confidence.

Get in touch now and get talking to a broker over the phone.