Auction Finance, a provider of loans for auction purchases, recorded almost a 300 per cent increase in property bought at auction using its services in the first three months of 2014, compared to the two previous years.
Three regions, away from the South East and London saw significant increases, with the West Midlands recording an 850 per cent increase compared to 2012 and 2013; indeed the first three months of 2014 saw the number of sales supported through Auction Finance almost reach the figure for the whole of 2013 in the region.
Two other regions recorded significant increases, with the North West (250 per cent) and Yorkshire and the Humber (350 per cent) proving hotspots for sales of property through auction.
Scott Hendry, director of Auction Finance, said:
“As the leading principal lender solely dedicated to the auction market, we have seen a shift in the requirements of property investors at auction over the past year; this is particularly reflected in the regional increases in property sales through auctions.
People are not abandoning the South East, but those in the regions are simply showing their diversity in the house buying process and turning to the auction houses to buy property, which is increasing the demand for a variety of loan products.”
In 2013 one of the largest property auctions in the UK sold a record number of lots and predicted the way people think of buying property is changing.
Auction House property sales reached almost 2,600 last year, an increase of 23 per cent on the previous record.
Mr Hendry added:
“Currently only five per cent of houses are bought through an auction, but as most of these are completed in about a month, it makes the buying process a quicker and sometimes easier experience. The figures from Auction House and our regional statistics demonstrate that not only the housing market is picking up, but people are using auctions to buy and sell property, particularly in the regions outside of the South East.”
Buying a house through an auction is often seen as the last resort to sellers, but Mr Hendry admits there is an appetite for change.
Mr Hendry concluded by saying: “Using an auction should be the first choice for many people selling a property, as it can often lead to getting a better price than the traditional estate agent route. Prices only go up at an auction and about 80 per cent of properties sold are completed and exchanged within four weeks.
Time will tell if the increase in people using auctions to buy property will continue, but at the moment we’re confident it will.”
Loans from Auction Finance typically vary from £20,000 to £3m, with an average loan size of £67,500. Funds can be transferred just 24 hours after completion. The lender was recently named Supplier of the Year in the Products for Funding category at the Landlord and Letting Awards 2013.
