The Facts: Property Prices at UK Auctions

Houses that go under the hammer at auction sell for less than those on sale on the open market in 99% of cases.

Properties at auctions are there because the seller wants to sell them fast, which means in most situations they are willing to accept lower than their value in exchange for a quick sale.

Auction properties normally sell for around 15-20% lower than they would sell for on the open market.

Over the past couple of years the gap between auction properties and those sold through an estate agent has widened further as more repossessed properties appear at auction and auction buying becomes more popular.

House Prices Verses Auction Prices

In the same way that properties are falling in value with estate agents, they are also falling at auctions. A recent study by one online estate agency showed that homes under the hammer were sold at a 15% discount. This can fluctuate throughout the year and it is not uncommon for properties to be sold at 30% less at auction than their value.

House Prices By Region

Properties in the South of England still sell for more at auctions than ones in the North of England.

The below list offers a guide to what the average price of a property sells for in different regions of the UK (as of 2010) the price will vary dependent on the type of property such as whether it is detached, semi-detached or a terraced property.

• London – prices at auction will vary, but the average price is £320,000
• The South East – prices average around £220,000
• The South West – prices average around £180,000
• East Anglia –prices average around £150,000 - £160,000
• The West Midlands –the average price will be around £140,000 - £150,000
• Northern Ireland – prices average around £140,000
• The East Midlands – prices average around £130,000
• Yorkshire and Humberside –prices average around £130,000
• The North West –prices range between £110,000 - £130,000
• Wales – prices range between £110,000 - £130,000
• Scotland – the average price will be around £110,000
• The North of England – prices range between £110,000 - £130,000

Threats To Prices At Auction

Unlike property prices on the high street, properties at auctions may soon lose some of their sparkle. Auctions rely on a large volume of properties coming through their doors from lenders who have repossessed the properties and want to sell them as quickly as possible.

They also rely on this from homeowners. Lenders are coming under a lot more pressure not to repossess people of late though, which means there are less repossessed properties to go to auctions. Auctions have been benefiting from the credit crunch and people in financial difficulty, and although they will still be able to do this they may find their stock of properties decreasing.

Properties at auctions are there because their owner wants to sell them quick, which normally equates into a lower price for you the bidder. Auction houses are not for everybody though and it is worth remembering that something is only a bargain if you genuinely want it.