Residential Auction Market
Overview
The third quarter of 2024 has ushered in a period of renewed optimism within the UK Residential Auction Market. The confluence of reduced interest rates, a newly elected government, and a burgeoning sense of security amongst investors has fostered a more favourable environment for residential property transactions.
This renewed confidence is expected to strengthen as interest rates continue their downward trajectory. This monetary policy shift is anticipated in light of recent reductions in European interest rates and the UK's inflation rate falling below the government's target. The current landscape presents the most positive outlook for residential investment in nearly five years.
The total value of residential property sold through the Allsop Residential Auction team from January to September 2024 has exceeded £466M, maintaining a robust overall success rate of 88%. This performance underscores the strength and resilience of the residential auction market, particularly within the context of broader economic shifts.
Allsop's Q3 performance exemplifies the broader positive trends in the UK residential auction market. In Q3 2024, we have witnessed substantial activity across various property types and regions with the Allsop Residential Auction team selling £194M of property, achieving an unparalleled success rate of 90%. This accomplishment significantly surpasses the current industry average success rate of 70%, and was rounded off with a stellar September auction generating £92.8M in sales, demonstrating continued buyer confidence.
Q3 - 2024 Results:
Lots offered
Lots sold
Success rate
Total raised
Total Results – Calendar Year 2024:
Lots offered
Lots sold
Success rate
Total raised
Digging deeper into the performance of recent months, analysis of individual lot data from our June to September auctions reveals some notable trends:
Regional Strength
While activity was distributed across the UK, the Northeast region saw particularly strong performance. 25% of the total number of sold lots this quarter were located in the Northeast, highlighting its attractiveness to investors
Yorkshire and Humber
This region also stood out, contributing to the quarter's success with a 91% success rate, surpassing the national average
Investment Appetite
Investor demand remains strong, with Investment lot sales this quarter accounting for 56% of all sold lots
Attractive Yields
The average Initial Yield for sold investment properties in the Northeast reached an impressive 12% during this period. This is significantly higher compared to Greater London, where the average Initial Yield for sold investments averaged 6%, reflecting varying levels of return expectations across regions
Direction of Travel
As we move into the final quarter of 2024, the expectation is for sustained growth in the Residential Auction Market. With interest rates unlikely to increase, investors and developers can proceed with greater certainty, contributing to a more vibrant and active market in the months ahead.