Whilst there have been rent falls in percentage sold, success rates at auctions nationwide for both residential and commercial properties, other indicators including the number of lots offered and amount raised show a marked increase in September over the same month last year of 15% and 5.4% respectively (EIG group).
Investors are obviously recognising and seizing the opportunities available now - especially with private treaty sales in the doldrums. Estate agents are reporting transaction rates dropping by as much as 45% over the same period last year, whilst auction transactions (lots sold) have only dipped by around 25-30 percent.
Toby Limbrick, Director of fast-growing property auction group, Network Auctions, said:
"Prospects for the future are therefore positive - especially as funding for investors has a greater degree of robustness in a perceived tightening market.
"Auctions provide a fast and certain sale and present opportunities to not only rationalise portfolios by selling surplus or unprofitable property, but also to turn a quick profit by buying discounted property locally and selling on a national platform, such as offered by Network Auctions, where attracting a wider purchaser profile may obtain a better result.
"The recent spending review by the Government will affect the property market and this is where investors could have even more opportunities in the future."
The proposed cuts in the public sector will encourage local and national government to sell off more redundant properties in order to divert expenditure to other key areas - including refurbishing existing housing stock and even building new affordable homes.
Predictions of 100,000 people from local government who are likely to lose their jobs, will also increase the number of repossessions available and many of these will find their way to auction. Equally, the reluctance of banks, especially, to loosen private lending constraints will also add to the number of repossessions.
House prices are continuing to fall as vendors become more realistic about the value of their property. If a house move becomes imperative then auction will become the favoured route as speed may be of the essence.
If affordability becomes the name of the game, we may also see more private buyers attending auctions in order to buy at the lower end and refurbish themselves.
Investors - especially in the buy-to-let sector - will see an increased demand for rental property and opportunities to buy suitable properties to add to their portfolios will become a major driver in 2011.
Toby Limbrick, concluded:
"We expect that auctions in 2011 will remain buoyant and are likely to be viewed by vendors increasingly more as a prime solution to their personal or corporate circumstances. The range of properties offered is likely to become more varied - both residential and commercial - and the opportunities for investors will favour those who have a more creative and entrepreneurial approach to buying property."
