It's probably fair to say that the Chancellor has thrown the property investor quite a few very oddly shaped curve balls over the last year or so - the latest being the changes to tax relief and the stamp duty premium. Most property investors, therefore, would probably like to know what consequences these changes might have for the property market in the future. While only the passing of the years will tell the full story, one way to get an early 'heads up' is to look at trends in the auction market - since the announcement of significant tax changes has, in theory at least, the power to affect buyer and seller sentiment at auctions within a matter of weeks. In this report we will take in some expert comment on how the auctions market is doing in early 2016, and what prospects for the future might be.
First a few statistics: Figures from Essential Information Group (EIG) suggest there was a very slight slowdown in auction buying and selling when looking at the market as a whole (residential and commercial) over 2015. Over the year, there was a fall of 5% in numbers of lots offered (down to 33,241 lots) and a fall in lots sold of 3.5% compared to 2014. Only two of the 12 months showed a gain in lots offered (June +1.7% and November +17%). However, the percentage of lots sold last year increased slightly by 1.6% and the value of lots sold increased by 2.6% to almost £4.5bn. EIG says that the figures were impacted by a tailing off in the commercial market in the latter half of the year but add that their figures indicate there is still a high demand for auction property despite the slight dip in available stock.
Now, let's take in some thoughts from the rostrum. Firstly, Chris Coleman-Smith, head of Savills Auctions, suggests it has been 'full steam ahead' in the auction room over the last year. He tells us: "2015 was a record year for Savills national auctions, with the highest total value of property sold in our team's history. Last year we also sold more properties within the M25 than any other auctioneer as well as a selection of unusual lots from unexcavated basements to pieces of pavement and alleyways. Looking ahead, we already have plenty on our books for 2016. Our first auction in February is set to have a bumper catalogue and we're very positive about the coming year."
On current demand trends he adds: "Houses in up and coming London suburbs are highly sought after, with an increasing number of family renters driving demand for this type of stock."