Note: This article focuses on Residential properties sold by auction, so doesn’t consider land, commercial premises and so on.
Property Auctions can be a fast and convenient way to sell a house. The downside is that you usually expect a bit of a lower price. So overall, how popular are auctions? How many properties sell by auction each year?
Around 18,000-20,000 residential properties sell by auction each year. This accounts for around 2.2% of total home sales.
Here's a breakdown of the data for 2020:
- Data from the Office For National Statistics shows that 651,987 homes were sold in England and Wales during 2020.
- Essential Information Group are the industry-standard for property auction information. We compiled data from their monthly newsletters and found that 15,009 properties were sold in 2020 via auction.
- That means 2.3% (or about 1 in 45) houses were sold via auction in 2020.
But there are other interesting questions to consider as well. For example, what's the average value of a house sold at auction? And how successful are auctions?
Let's do a quick run through some other interesting property auction facts - and how you can use them to your advantage.
1. Property auction facts: Sales, success rates and other trends
There's a wealth of information available online about property auctions and the wider housing market. The difficulty is just in pulling it all together and making sense of it!
That's what I've tried to do for you here. These are some of the most interesting stats and trends I've found in the data, and I think are worth keeping an eye on.
PS... I'll keep this article updated as new quarterly or annual data becomes available.
1.1. Property auction sales over time
We compiled data from EIG's monthly newsletters, and analysed it to see whether property auctions were growing, shrinking, or staying about the same.
There's been an interesting trend since 2008.
Here's a rough summary:
- Auction sales climbed after the financial crisis, before subsiding again to around 16,000 per year.
- Between 2010-2013, they climbed 25% to around 20,000.
- Volumes stayed at this level for around 5 years from 2013-2018
- Auction volumes declined about 10% from 2018-2020
- The pandemic had a big impact on auction sales, as practically nothing sold for 2-3 months.
- Auctions then began climbing in popularity in 2021.
The climb in popularity throughout 2021 is driven by the difficulty in getting sales completed in the wake of the pandemic. That's one of the great things about selling via auction - there's just a much higher level of certainty.
But do properties always sell when they go to auction?
1.2. Do properties always sell at auction?
One of the reasons people choose to sell at auction is because of the certainty that it offers them.
Auctions have a much higher success rate than selling through estate agents. (If you're interested, 2018 research by financial services company Jefferies revealed that estate agents only sell around 51% of properties they take on. Read the coverage on The Financial Times here).
So, if estate agents are at about 51% success rate, how have auctions done over time?
You can read more about property auction success rates in our article below. It includes things that impact the success rate too, and what you can do to improve your own chances of selling at auction:
1.3. What's the average value of an auction property?
The pre-conception is that properties sold by auction are at the lower end of the market. We sometimes envision derelict houses, or properties in need of complete renovation.
But the data tells us that isn't really the case. Here's data for the last 5 years:
Although the average value of a property at auction is less than the national average house price, it's not by a huge amount. There's still a wide range of "normal" houses going to auction.
You'll notice a big jump in the average sale price for 2021 though.
Why is the average value of an auction property climbing?
There are two reasons for this:
- House prices are rising. This is a pretty obvious one I guess! Property prices have been rising during this period, so it's natural that auction prices would rise too. But what's the other factor?
- Modern Auctions now allow mortgage buyers to take part in auctions. These are buyers who tend to pay the highest prices, and this has two knock-on effects. 1) Higher bids lead to higher sale prices. 2) More auction buyes willing to pay higher prices naturally attracts higher value properties into auctions.
1.4. Do houses sell for less at auction?
This is a really tricky one to answer. You can't just compare the average auction sale price to the average sale price of the wider market. This is because different types of properties go to auction. It'd be like comparing apples and oranges.
We've done a bit of a deep dive into this though, sharing the research and data we can find. It's worth a read:
2. Why do properties go to auction?
So, around 2%-2.5% of properties are sold by auction. Why do these sellers decide on auction as the best way to sell?
There are some significant benefits to selling via auction. Broadly, you'll get a faster sale, it'll be much more convenient, and you have a better chance of selling (compared with going with an estate agent).
We've written a full in-depth article on this exact topic here:
2.1. How do you sell a house via auction?
If you think auction may be right for you, then you may be wondering how the sale process works. We've got a full in-depth guide for that too:
That's a pretty hefty article, so there is actually a quicker way to learn. Just give us a call. We'll talk you through the process, and pair you with the auction house who are going to be the best fit for you. It's a free service, and we're here and ready to chat:
By Matthew Cooper, Founder of Home Selling Expert