Are Property Auctions becoming more Mainstream?

Are Property Auctions becoming more Mainstream?

Welcome to Surelock Network Auctions’ June Newsletter!  There’s been a host of interesting property news out there in recent weeks, much of which could affect your property purchasing decisions. Read on to see what we think are the top topics for the property auction world.

Could property auctions be becoming more popular with ‘normal’ residential home-buyers? There are a number of reasons to think this could be the case. Chief among them is the speed at which a sale and final price is achieved and legally agreed. While this reasoning can work across the whole spectrum of property sellers and buyers, the new tax rules that mean owners of more than one property must pay an additional 3% in stamp duty, work in favour of selling and buying at auction.

Why? Well, where in the past some home-movers may have been willing to own two properties at the same time to ensure a sale went ahead, a spike in stamp duty makes this option less attractive. Of course, you can claim the additional 3% back if you own two properties for 36 months or less, but some home-owners may be unwilling to take a chance, particularly when there is another option.

Another reason is that while uncertainty over the EU referendum (more on that later) may be limiting the number of properties being put up for sale through high street estate agencies, that doesn’t appear to be the case for auction lists. Again, the speed and legally binding contract that is signed on the day works in favour of property auctions, as does the complete transparency of the entire process.

Property Repossessions Fall to Record Low

Data from the Council of Mortgage Lenders shows the number of mortgaged residential properties that were repossessed in the first quarter of this year fell to a record low of 2,100. That’s down from 2,200 in the fourth quarter of 2015 and 3,000 repossessions in the first three months of 2015.

The CML itself, among other industry leaders, say this ongoing decline in repossessions is mainly down to the helpfulness and forbearance shown by lenders to borrowers.  “Lenders continue to work very effectively to help their borrowers through periods of difficulty when they do occur, and borrowers should be reassured that most cases of arrears can be resolved and will not lead to repossession,” said CML director-general Paul Smee.

An additionally supportive factor is the assistance borrowers continue to receive from the record low Bank of England interest rate of 0.5%. That lower for longer rate stance has benefitted the UK economy for some time now, and should continue to do so even when rates begin to rise.

EU Referendum Takes Centre-Stage

With around only three weeks to go until Britons take to the polls to decide whether or not the UK should remain part of the European Union, it would be remiss of us not to mention it.

We hope you enjoyed Surelock Network Auctions’ thoughts on the issues discussed in our June newsletter. If you want to keep up-to-date with Surelock’s auction dates visit our website and to keep abreast of our news and views, take a look at the blog section.

We welcome any comments on the points we have mentioned, or any questions at all, even about a property you are interested in that isn’t listed at one of our auctions. Additionally, if you want to share your own views on another topic, please contact us. You can get in touch by responding to this email, tweeting us @KhalidAuctions or commenting on the blog section of the Surelock Network Auctions website.

 

 

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