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http://www.citywire.co.uk/partners/redirec...9&ea=155394

Lorna Bourke: Customers drift away from property auctions

By Lorna Bourke | 07:00:00 | 10 March 2008

I went to a property auction last week - fascinating, if a little disappointing. The property I wanted sold for a 16% premium over the guide price – more than I was prepared to pay. But even more interesting, some two thirds of the properties were withdrawn because they didn’t meet their reserve.

This is a very high proportion of unsold properties. Until the credit crunch took hold last August, auctioneers would expect to sell around 80% of properties and even today, with uncertainty about house prices, around 60% of lots are successfully sold at auction.

So what is this telling us about house prices? The good news for sellers is that attractive properties in popular locations are still sought after and people are prepared to pay a premium if they really want something. But average properties are being overvalued and are unlikely to find a buyer.

My experience is mirrored in national statistics. Latest figures from the Royal Institution of Chartered Surveyors (RICS) show that the rate of successful sales at residential auctions in the UK for the final quarter of 2007 at 57% was the lowest level for three years. In 2006 the figure was 69% of properties sold.

This has left 3310 properties unsold at auction houses as demand has weakened, a rise of over 50% from a year earlier, while the number of properties offered at auction was 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 homeowners have struggled to service their mortgages following last year’s interest rate hikes and tougher refinancing conditions, says RICS. Like the Council of Mortgage Lenders, RICS is expecting the number of repossessions to increase by 50% to around 45,000 in 2008.

‘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,’ said RICS economist, Oliver Gilmartin. Many buyers at auction rely on short-term finance to purchase and improve properties, remortgaging once the restoration has been completed. Much of this short term credit has dried up. ‘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,’ said Gilmartin.

The figures are confirmed by monthly statistics from EIG which monitors UK auctions of both residential and commercial property. Their figures show that while more lots were offered at the 31 auctions held in January 2008, compared with January 2007, the amount raised slipped 25% to £50 million, as did the sale rate which was 62% for January 2008 compared with 82% for January 2007. The proportion of unsold lots was 38% for residential and 37% for commercial.

All of which is bad news for those selling property at auction – but good news if you are a cash buyer. However, many homebuyers and buy to let investors will want to wait to see where house prices settle before making any further commitments.

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You just couldn't make this up could you, but you can't go wrong with propodee can yer? :lol: I would say that the OP is pretty much stereotypical of the average UK sheeple, property porn brainwashed idiot:

Hi, Wondered if anyone has any advice for me! I bought a property at auction and am now struggling to get a mortgage. We have been offered a self-cert mortgage but the redemptions penalties are really high, also the broker fees are over #5000. Unfortunately as our situation is so complicated, it seems no one is willing to offer a mortgage without these huge fees. Any advice would be greatly appreciated!
It's fairly complicated because my husband is self-employed, so his certified accounts do not show his full income. Also he has a CCJ of #1500 (2years old) which has been repaid. The property we are buying is in a fairly bad state, although the valuation has reflected the amount we are paying for it. I do not work at the moment as have 3 young children. Oh, forgot to mention this is a property we wish to do up and sell, we already have a mortgage on our house.

Sorry the info is a bit jumbled, difficult to explain properly!

:lol:

Dumb, wanna be Sarah Beeney brainwashed idiot! :lol:

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http://www.eigroup.co.uk/auctioneers/templ...p;a=4&c=ath

Stuff just isn't budging. Unrealistic reserved prices. One of these didn't sell because it was £1,500 short of the reserved price. FFS! :lol:

Not a single property with a reserve sold, amazing. As you say unrealistic expectations. I wonder how many of them without a reserve went well below expectations?

Damo

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We, ignorantly did not get an offer before the auction as really did not expect to get the property.

I don't think the word Ignorant comes anywhere near to describing these people. Were they only bidding to create HPI I wonder?

SquatNow makes some good points, which might scare other ignorant aution-goers into being a bit more sensible.

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http://www.eigroup.co.uk/auctioneers/templ...p;a=4&c=ath

Stuff just isn't budging. Unrealistic reserved prices. One of these didn't sell because it was £1,500 short of the reserved price. FFS! :lol:

Check out no.7. You said £330,000, our survey said Uhhh Uhhh. They're expecting about 10% increase over the last year, got 20% decrease:

http://www.houseprices.co.uk/e.php?q=hp9+hollies&n=100

E had a reserve of 71.5% of last October's land registry price and didn't sell :o

http://www.houseprices.co.uk/e.php?q=74+la...r+wa5&n=100

Edited by jimmy_joe

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You just couldn't make this up could you, but you can't go wrong with propodee can yer? :lol: I would say that the OP is pretty much stereotypical of the average UK sheeple, property porn brainwashed idiot:

:lol:

Dumb, wanna be Sarah Beeney brainwashed idiot! :lol:

Oh my god. When the really, really, really stupid get into something as an "investment", it really is time for the rest of us to run for the hills.

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I don't think the word Ignorant comes anywhere near to describing these people. Were they only bidding to create HPI I wonder?

SquatNow makes some good points, which might scare other ignorant aution-goers into being a bit more sensible.

The best of which is the 1st one...

No-one with a brain is going to lend you money in your situation in the current market. So try Northern Wreck then.

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  • 297 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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