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% Of Property Sold At Auction , Plummets

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Auction sales at three-year low

Mar 3 2008

The success rate for residential properties sold at auction fell to the lowest level for three years, according to the Royal Institution of Chartered Surveyors.

The drop is mainly due to tighter lending conditions and greater uncertainty over the outlook for house prices.

In Q4 2007, only 57% of properties fell under the auctioneers hammer compared to 69% in the same period a year ago. More than 4,500 properties were sold, a decline of 9% on the same quarter in 2006, also down by 9% on the previous quarter.

This has left 3,310 properties unsold at auction houses as demand has weakened, a rise of over 50% from a year earlier. The number of properties offered at auction was still close to historically high levels, with 7,732 properties placed under the hammer.

The overall number of residential properties offered at auctions rose by 15% in 2007, while the number of repossessed properties rose by around 20%, indicating that many have struggled to service their mortgages following last year’s interest rate hikes and tougher refinancing conditions.

This trend looks set to continue as the number of repossessions could increase by a further 50% in 2008.

Homeowners coming out of fixed-rate mortgages will face a tighter credit environment, reduced mortgage competition and tougher refinancing conditions as banks and building societies continue to raise interest rates to recoup battered profit margins.

RICS economist Oliver Gilmartin said: “Fears over further house price falls have taken some stimulus out of achieved sales at the auction house as specialist lending has all but evaporated. While lots offered at auction have stabilised, we expect a tougher year for many at the margins in 2008 as mortgage providers become more selective.

“Although tightening credit conditions will be most acute for those with a poorer credit history, less generous loan amounts and the introduction of some upper limits on loan advances could equally hit the mid-tier of the market, increasing the number of properties languishing on auction property books.”

Properties sold at auction in Q4 2007 down 9% from Q3 2007 :o ...........

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...but what happened to all those BTLs and FTBs who were 'apparently' going to jump in as soon as there were bargains to be had? :unsure::lol:

saving and watching the crash :D

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...but what happened to all those BTLs and FTBs who were 'apparently' going to jump in as soon as there were bargains to be had? :unsure::lol:

Nobody wants to buy today, something they know will be cheaper next month.

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