There has been a sharp rise in the number of property investors snapping up property at auction and the reason has been credited to easier access to finance, as lenders report significant growth in lending, surpassing pre-property crash levels.
The number of properties sold at auction is booming as property investors seek to build rental property portfolios below market value (BMV), without breaking the bank.
There has been a huge increase in the number of loans that have been financed by specialist lenders over the past 12 months, with average loans increasing by more than 22% according to property finance lender, Auction Finance Limited.
The news comes as the latest Essential Information Group (EIG) figures show a seven year high for UK’s auction houses, with lots sold in October 2013 up by 30% compared to October 2012. These record figures have now surpassed pre-recession auction house transactions.The residential property auction market saw a double-digit increase in October, based on year-on-year figures, with the number of lots offered, up 26.6%, and the number of lots sold, up 38.3%. The total revenue raised by property auctions climbed by over 51% year-on-year to £298 Million (GBP).
The commercial auction sector also showed substantial gains with the number of lots sold in October 2013 up 9% on the same period last year. Annual sales to October 2013 increased by 11% on the previous 12 months.
Director of Auction Finance, Scott Hendry, said: “These figures are fantastic news for the industry. As the leading principal lender solely dedicated to the auction market, we are seeing a dramatic rise in the number of people turning to the auction houses to buy property, which has led to a 50% increase in the amount of funding we have provided in the past 12 months. Buy-to-let investors in particular favour the auction house to buy properties with speed and at bargain prices and we’re committed to making fast and reliable funding available in order for them to develop their portfolios.”
Managing Director of the Essential Information Group, David Sandeman, commented on the auction house success: “The long-term outlook for the auction market looks positive. In the last 12 months the gavel fell on almost 1,700 more lots than in the previous 12 months, up 7%, with total revenues of £3.75 Billion (GBP),up almost 1%.”
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Inside a property auction
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