Homes for sale at auction increase

An increase in the number of house repossessions has resulted in a rise in the number of homes being put up for auction, the numbers reaching their highest level for over two years.

Figures from the Royal Institution of Chartered Surveyors (RICS) show that between March and June this year, a total of 5,120 home were under the hammer, an increase of 22% on the previous three months.

The increase appears to have been driven by the increasing number of repossessions, as homeowners have struggled with household expenses after seeing the base rate rise five times since August 2006.

RICS sees a bleak 2008, with forecasts that over 45,000 home could be repossessed by mortgage lenders. That amounts to 124 per day, and the number of properties on sale at auction will inevitably rise as a result.

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 area with the largest number of homes put up for auction in the second quarter of this year was the North West, with 826 up for sale. The region also had the biggest quarterly rise in repossession orders in early 2007.

The South East and the home counties also saw a high degree of auction sales, along with London and the West Midlands. Activity was lowest in Scotland and East Anglia.