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Auction houses are reporting huge rises in the number of residential properties being put up for auction – a symptom of continuing house price falls and a rise in the number of homes being repossessed.

Whilst property auctions have never taken off here in the UK in the way that they have in Australia and New Zealand, some savvy prospective buyers have snapped up many a bargain at an auction house.

Now, this trend looks set to explode and auction houses are expecting an influx of new properties onto their books as the number of repossessions rises and lenders try to sell the homes on.

Recently, the Council of Mortgage Lenders said that repossessions were expected to rise from about 45,000 last year to a whopping 75,000 this year, and auction houses are likely to reap the ‘benefits.’

Eigroup, the auction properties company, revealed a 22 per cent rise in the number of lots coming to auction over the past year.

As auctions delete the hefty administration costs usually involved with purchasing a property and often offer a cheaper asking price, they can be a good bet in the current economic climate.

Auctions can also provide a far more speedy property purchase time – as no estate agents are involved and there are no onward chains that could collapse, new buyers can usually become owners far more quickly.

Repossessed properties – which are now turning up on the books of every auction house – will often offer a lot of house for your money.

Savers, who feel reluctant to keep their money in a bank due to the current instability and low returns, may well decide to plow it into a bargain property instead.

As finance will be needed straightaway if you purchase auction property, that may prove a stumbling block for first time buyers.

Allsop, the largest residential auctioneer in the UK, recently announced that it had sold 91 per cent of its catalogue last month, with attendance at auctions on the up.

Gary Murphy, Partner and Auctioneer at Allsop, told TheMoveChannel.com, “Prudent buyers with cash to invest are now facing real investment opportunities.

“For occupiers, and first time buyers in particular, there is a great variety of property for improvement available at auctions,” added Mr Murphy.
 
Mr Murphy also said that auctions ‘differ from estate agents by providing market-related value for money without a direct connection to the seller’s asking price.’