Charles Lovell, Head of Auction at Auction House Robinson & Hall, says: “The auction industry could end up benefiting from the forthcoming downturn in the property market because it provides the quickest and simplest solution to selling unwanted property.”
“Earlier this month the Bank of England announced a rise in interest rates of half a percent, the biggest increase in the cost of borrowing for 27 years. Many experts are predicting that inflation could hit 15% by the middle of next year. The UK is predicted to fall into recession later this year, with the longest downturn since 2008 expected and gross domestic product falling by as much as 2.1%. Together, this will inevitably have a significant impact on the mortgage market and the housing market in general.”
“But it also means that some buy-to-let landlords and investors will decide to divest themselves of part or all of their portfolio and the most obvious route for them to do so is by auction. In fact, it might mean an increase in the number of sales and amount of money raised on behalf of our clients.”
“If inflation reaches 15% as predicted, the only way to get it down is to increase interest rates. Last week’s rate rise of half a percent is going to pale into insignificance in the next 16 months, as rates will inevitably continue to climb.”
“We are starting to see more caution in the market, although attractively priced lots are still achieving strong sale prices. We are also hearing reports within the private treaty market of valuations being downgraded by lenders and deals taking much longer to complete.”
“That is not the case at auction, where both buyers and sellers appreciate the speed and certainty of the process, and the deal is done on the fall of the hammer. This is evidenced by our success rate of 88% year to date.”
“This is not to suggest that there will not be challenges ahead for the auction sector but we do have a degree of resilience not evident elsewhere. So, despite the softening of the market, we are predicting that the supply of lots to our auction and high rate of success of sale will continue in these uncertain times.
We are now taking lots for our next auction. To find out how Auction House Robinson & Hall can help you or to book a no obligation auction appraisal, please call 01234 362899 or email firstname.lastname@example.org