Auctions hit 3-year low

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by Kay Murchie

According to the Royal Institution of Chartered Surveyors (Rics), the number of properties sold at auction has hit a 3-year low.

The organisation attributes the fall to the credit squeeze which occurred following the collapse of the sub-prime mortgage crisis in the US which, in turn, has brought about uncertainty in the UK property market.

The research discovered some 57% achieved a successful sale during the final quarter of 2007, a decline of 9% compared with the same period the previous year and also down 9% on the previous 3 months.

Oliver Gilmartin of Rics commented on the research and said concerns over further property 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, added Mr Gilmartin.

While 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, concluded Mr Gilmartin.

However, Rics maintain that going to auction is still a popular method of sale, with 15% more residential properties being offered for auction in 2007 than the previous year.