Sold! Surge in UK homes being bought at auction | Money
It’s the 17-year stalwart of daytime TV, famous for revealing the hidden potential of dilapidated properties and the rapacious profits of the punters bold enough to buy them at auction. Now, Homes Under the Hammer is being credited with fuelling a new boom in the property market, as auctioneers report a sharp increase in sales and bidders – particularly for family homes – during the pandemic.
Savills says it has sold property worth more than £240m at auction this year, almost 40% higher than the same period in 2019, while last week Auction House announced it had sold £65m worth of property in October alone, a new record. Auctioneer John Pye Property said the total value of properties it sold between May and October this year was 126% higher than that achieved during the same period last year. The number of bidders at its auctions also rose by 52%.
Since March, property auctions have been taking place online, making them seem more “accessible” to first-time bidders who are fans of Homes Under the Hammer and have more time on their hands during lockdown. “Going to some of the big metropolitan auctions can be quite intimidating,” said Charles Lovell, head of Auction House Robinson & Hall. Now, he says, “anybody can just log on and watch the auction … That can draw them into considering auction as a means of purchasing a property.”
Normally his firm successfully auctions off about 81% of the properties on its books – during lockdown, the figure is nearer 96%. “I think there’s only one property we offered which didn’t sell.”
He credits Homes Under the Hammer with introducing more people to the concept of buying at auction: “It has made it more mainstream.” He also suspects more people have been watching the show, with so many people furloughed or working from home. The BBC said ratings for the show, hosted by Martin Roberts, rose by 27% in the first lockdown.
Lovell says the speed and certainty of an auction transaction is also attracting homeowners. “There has been an increase in the number of owner-occupiers purchasing rather than investors or speculators. Speculators have been a little concerned about where the market is likely to be in six to nine months, while owner-occupiers are keen to push on because of the stamp duty holiday.”
Buyers can currently save up to £15,000 in stamp duty if they buy a new home in England and Northern Ireland before 31 March, but high demand for mortgages means lenders are taking twice as long as usual to approve a mortgage offer. Lovell said: “A lot of people are fearful of long, drawn-out, protracted purchases that might not necessarily conclude in time. With an auction, they can go and view a property – and exchange contracts a week later.”
Low interest rates also make borrowing to renovate a home seem more affordable than usual and Chris Coleman-Smith, the head of auctions at Savills, thinks dissatisfied homeowners and renters potentially have more time to search auction sites for their dream home. “During lockdown, people’s thoughts have become more concentrated on the place where they live, and their outside space.”
As a result, the number of family homes being sold under the hammer has surged in lockdown: across the country, Auction House reports the average selling price of this type of property has jumped by 40%, from £103,400 in 2019 to £145,500.
In May, Rosalynn Bairstow paid £256,000 at auction for her home: a 16th-century thatched cottage in an Oxfordshire village near the Thames. The property had previously been on the market for more than £400,000, but had failed to sell. “It’s a beautiful old cottage but it’s quite run down. It needs a lot of work.”
She hadn’t planned to buy her home at auction but fell in love with the property. “I’ve watched Homes Under the Hammer and other property renovation shows and I suppose they inspired me to think: I might be able to do that.”
Buying at auction was also attractive because it was the height of lockdown and Bairstow, a railway signaller, was living with her mother and elderly grandfather after a break-up. “I was keen to move very quickly. They were both shielding and I was going out to work.”
The property’s large garden played a big factor in her decision. “I like to spend time outdoors and lockdown made me realise that I definitely needed space outside. I wanted somewhere I could have my own vegetable patch and some chickens.”
Buying at auction was “nerve-racking”, but overall she found the property purchasing process easier than usual. “It’s a lot more certain, and there’s a lot less stress.”