Repossessions drive home auctions
The number of homes being sold at auction has reached its highest level for more than two years following a rise in repossessions, new figures have shown.
A total of 5,120 homes went under the hammer during the second quarter of the year, 22% more than during the previous three months, according to the Royal Institution of Chartered Surveyors (RICS).
The group said the increase was driven by a rise in repossessions, as homeowners struggled to afford their mortgages following recent interest rate hikes.
It added that the number of homes put up for auction looked set to continue to rise as increasing numbers of properties are repossessed.
RICS is predicting that more than 45,000 homes could be taken back by mortgage lenders during 2008, the equivalent of 124 a day.
RICS economist Oliver Gilmartin said: “With the full impact of interest rate rises in 2007 yet to filter through into higher mortgage costs, we continue to expect a rise in the number of homes going under the hammer into 2008.
“The auction house will continue to be a quick means to foreclose mortgages where properties have been repossessed.
“Encouragingly, the annual growth rate in repossession orders has eased back in 2007, having risen quite sharply during the back end of 2006. However, RICS estimate that repossessions will continue to climb higher into 2008 and could exceed 45,000, a rise of 50% from current annualised rates.”
The North West saw the highest concentration of homes sold at auction during the second quarter, with 826 homes there going under the hammer.
The region saw the biggest quarterly rise in repossession orders six months ago. There were also high levels of auction activity in the South East and home counties, London and the West Midlands. But fewer than 100 homes were sold at auction in Scotland, and levels also remained low in East Anglia.