Our MD, David Sandeman, was asked by the Property Solvers to give his expert view on the property auction market for 2020. With Brexit around the corner, this decade of property is likely to look very different from the last. Here is what David had to say about it:
What a year 2019 was; looking back on what I wrote at the end of 2018 I noted that the events of 2018 were fairly stagnant but all would improve once we had a firm decision on Brexit in early 2019, as was the political outlook then. However, the whole year never had a news broadcast without Brexit being the headline and the Auction market declined even more in terms of number of number of sales, number of lots offered and the amount raised.
Towards the end of last year, with the prospect of a Labour government coming to power, this threw further chaos into the mix. It was only after the election in December 2019 with the Tories getting a significant majority and being able to virtually guarantee that Brexit would happen on January 31st, 2020, that we could have any confidence as to the direction going forward.
My predictions for 2020, were very similar to those made in 2019; that once Brexit was behind us, albeit not negotiated, we would be able to move forward with an underlying value to every property and with the prospect of sensible transactions taking place in increasing numbers.
Looking at the figures overall for 2018 and 2019, we saw a drop of 8% in lots offered and in the amount raised of 13%. The biggest falls were seen in the commercial market which had the double whammy of uncertainty on the high street where many of the commercial auction lots are to be found.
Looking forward to auction activity in 2020, I would expect it to level out and hopefully increase, albeit in single digit percentages, given that we have a higher level of geo-political stability than we’ve seen for a few years and base rate looking to remain at sub 1%. This is however set against a backdrop of ever-increasing regulation and cost of acquisition for the private rented sector.
From our subscriber point of view, we are already seeing old clients coming back to the auction room with a view to acquiring properties to either rent out or sell on for a capital gain and there is increased activity from new potential buyers looking at the auction market as a place to acquire future assets. Both of these factors are encouraging and hopefully the worst of the market conditions are well behind us and we can look forward to steadier conditions going forward.
What changes do you expect to see in the property auction market over the next year? Or even over the next decade? Let us know your thoughts on Twitter and LinkedIn, and keep in touch for essential property information through our newsletter!