So far this year, Savills has sold more than £300 million worth of property at auction. The average sale price is £330,000, though there have been 25 £1 million+ sales and one £7.15 million sale since the start of 2017. In the UK as a whole, £3.05 billion worth of property has been sold via auction this year.

So who are today’s buyers and what and where are they buying?

The spread of lots on offer and the diversity of our auction catalogue – taking in everything from ground rents through to mixed use opportunities and tenanted properties – means that there really is something for everyone now. And while in the past, auctions have largely comprised of developers and investors, this is no longer the case.

For example, there has been a notable rise in owner-occupiers looking for a property to live in. These buyers have realised that auction prices sit more closely in line with current market conditions and may even offer the chance of a bargain. They’re often looking for doer-uppers and makeover projects which they’re more likely to find at auction. If a lot is in the right location at the right price and also has the potential to extend or add value, that is often the one they will bid on. Equally, the raised media profile of auctions means that these buyers are much more clued up about the process than they used to be.

Developers still make up a strong proportion of our auction buyers. Unlike owner-occupiers, developers focus on lots in value areas and those tipped to be on the rise since being ahead of the curve is a wise investment. In London, for example, Crossrail has been a buzzword in auctions for the past few years and transport links will continue to play into developer’s criteria. Lots with land, planning permission and the potential to be reconfigured are the ones that see the most interest. Equally, picking out commercial lots that also have apartments or some form of residential space is key as it broadens an investment and income potential.

There has been a slowdown in residential rental investors buying at auction, though it remains a buying platform that offers plenty of opportunities. For these buyers, our advice is always to focus on lots requiring refurbishment and where a bedroom can be added or a lease extension can be granted, for example, rather than ‘oven ready’ properties with sitting tenants. And a house in multiple occupation rather than a single tenant will also allow for a better rental income.

What unifies all buyers is their motivation to make a savvy property investment. Against a property landscape that has been impacted by the introduction of higher rates of stamp duty, a cut to mortgage interest tax relief and tighter lending criteria, the auctions market has proved resilient. Where pricing has been the most prevalent industry theme, auctions have led on price adjustments. And, while buyers are certainly more selective, sensibly and realistically priced properties continue to draw in determined buyers.

As we move into the final quarter of 2017, we expect to see continued popularity for lots in emerging locations and where there is an opportunity to add value.

(*data from Essential Information Group)

Further information

Contact Savills Auctions