Surge in repossessed properties sold at auction predicted for final quarter
One of the UK’s most successful property auctioneers have announced they are predicting a rise in repossessed properties being sold at auction, during the final quarter of 2014.
Swindells Auctioneers are commercial and residential property auction specialists, based in Lincoln. For nearly two decades, the team has developed an extensive client base and is now said to be one of the nation’s most thriving auction houses.
Edward Swindells, Managing Director of the business, claims the increase is attributed to a seasonal trend, whereby asset managers aim to sell all remaining properties from earlier in the year, which have yet to secure a potential buyer.
A surge of lower value property stock acquired by auction houses may lead to an overall reduction in average property values, according to Swindells. By the end of the year, this could masquerade as a general cooling of the property market over the quarter.
This increase also has the potential to attract a large number of “flipper” investors, who will buy property in bulk to sell at auction come early 2015. However, Swindells raises the point that this strategy may fail to produce the same level of profit as it may have done previously, if there is to be a rise in interest rates.
"An increase in low value stock coming to auction is characteristic of this time of year when asset managers look to rid themselves of anything that has previously failed to sell in the traditional way," Swindells says.
"However, the kind of investors who are typically attracted to this sort of property would be well advised to adjust their expectations in terms of how profitable it may be when they come to resell the asset next year.
"Contrary to popular belief, we still think that interest rates could rise slightly before the end of the year as consumers embark on their Christmas spending sprees and the Bank of England has more confidence in the overall economy.
"Therefore, investors looking to turn a fast profit from low value property bought at auction over the next few months may have to hold onto it for longer than expected."