Auction update - 80% repossessions

At the November auction conducted by Allsop, the auction house, 80% of stock comprised repossessions from landlords and lenders, with 91% of lots sold raising £90m. EIG, the auction information service, is routinely recording discounts of 50% on new-build properties, and 25% on non-new build. For example, a two-storey terrace in Leytonstone, east London, bought in 2006 for £200,000 sold for £150,000 at auction on November 5.

Last month, a two-bedroom home in Surrey sold for £205,000 — 18% less than its 2004 sale price of £250,000.

The high sale rate was attributed to the catalogue comprising 80% repossessions sourced from several lenders.

‘Quite a few of the professional buyers were saying that they felt that it was difficult to compete against the private buyers at the auction,’ said Murphy.

‘One interesting comment made by a professional buyer was that he felt we were selling in a rising market, in the sense that they had come to bid for a flat in a block and ended up paying more for it than they had a month earlier for a similar flat in the same block.

‘That indicates to us that the market has, for the time being, reached a bit of a plateau and shown some signs of recovery.’

Allsop’s final residential auction of the year will be held on 15 and 17 December in central London.

Property Hawk comments

First time auction goers and landlords need to be wary of jumping in to buying property at auction as a result of the recent significant falls in residential property prices. Many commentators expect residential values to fall further next year and it could be a case that buyers could be jumping in now because they preceive prices to be low compared to their historic highs when by waiting they may be able to obtain them at much cheaper prices later on.