Auctioneers are getting far lower sales in recent months many local auctions are showing over 50% of lots withdrawn and unsold (at the time of writing December 2022).
Auctioneers we are speaking to are now refusing to list properties unless they have very low reserve prices – making it difficult to achieve the higher bids that they previously might have achieved.
Auctions are a barometer of the property market – when the market is strong, auction prices can be high, and in a tough market, properties sell for much less. This is due to a number of factors.
Factors dampening the auction market:
More landlords are selling than buying due to tax changes and tightening tenancy regulations. In addition, developers are having to build larger margins into their calculations as inflation causes material costs to go up hugely and labour shortages have increased contractor rates.
All of this, against a backdrop of expected further price drops, has made this once certain route to a fast sale (at auction), far more precarious than it has been for many years. Sellers need to be listing their properties at auction with lower reserve prices and adjust their expectations on what they might achieve.
When selling your house at auction, you should expect to pay your auctioneer around 2.5% of the price you get for the property and you should find out if there will be any advertising costs. You will need to pay a solicitor to help with the legal side of selling prior to the auction and on the day.
Sellers are having to set low guide prices in order to generate interest in the property. This coupled with lower reserves could mean a high risk approach to selling your property.
With fewer people bidding at auction and a downturn in the demand for property in recent weeks, much of this sentiment is predicted to continue. Selling at Auction has always been a risky method to sell a property, as there is no guarantee, but recently the trends being reported mean that sellers can expect lower prices for their properties compared to sales at auction back in July and August 2022.
If you are considering selling at auction and want to explore a more secure approach, consider Mark King Properties for a cash offer. It’s always worth having a chat, there’s no obligation but it might help make up your mind as to which route might be best for you. For an honest and open chat please contact me through my website www.markkingproperties.co.uk