Residential Auction Market
Overview
Moving into 2024, we were all eagerly expecting interest rates to be reduced, which ultimately did happen but not as quickly as we would have hoped for – the cuts we’ve seen have been piecemeal. But after a sluggish 2023 that sign of better times ahead was enough to set the direction of travel.
Why was 2024 such a successful year for Allsop’s residential auction?
The interest rate cuts seen in 2024 were certainly instrumental in reviving positive sentiment, but because of the gradual nature of the reductions and the caution with which they were applied, they hardly resuscitated the property market. Many of the sellers who chose to dispose of some of their properties last year had some level of debt which had become more expensive to service in a high-interest rate environment, forcing them to part with some of their holdings and recalibrate their portfolios. This resulted in a steady flow of new instructions for the residential auction team and in attractively priced opportunities for interested buyers.
Needless to say, some of the political events of the past year also acted as a powerful catalyst for the increase in selling instructions we saw in 2024. Ahead of the Chancellor’s Budget announcement, the market was rife with speculation, and ultimately, some unpopular measures, such as a 2% increase in stamp duty tax on second homes did get introduced, compelling a number of owners to exit their investments. Said speculation had put renewed pressure on those already minded to sell, and some investors did eventually exit the market and chose the auction route to dispose of their assets because of its reliability, swiftness and ability to achieve the best price.
We did not, however, witness any examples of portfolio disposals as a direct result of the Budget, so the panic selling claims reported by some national media over the past six months were, in my opinion, exaggerated. The fact that the much-feared capital gains tax hike on second homes never materialised also played a role in limiting the negative impact of the Chancellor’s measures on the property market.
What was the overall significance of the new fiscal measures unveiled in October for our market? A net increase in instructions, and, because the measures were not as punitive as some had expected, the residential property sector in 2024 continued to be seen as an attractive investment option by many.
Total Raised
Lots Sold
Success Rate
Looking Ahead to 2025
The market environment in 2025 should not be too different from 2024. Rates will likely remain on the downward trajectory, but any decreases will be slow and incremental.
With many businesses now facing an additional burden of higher employee national insurance contributions and increases to the minimum wage, some will have no choice but to pass these additional costs onto consumers, which will make it difficult to rein in inflation. How that will impact the Bank of England’s monetary policy remains to be seen, but we expect a busy 2025 due to our buyers’ willingness and ability to transact in cash and, of course, the fact that we’re a nation obsessed with property.
