Housing slump sees number of home auctions going, going up

Auctioneers say they are receiving more enquiries than ever before from homeowners desperate to sell their properties.

They are also seeing a sharp rise in the number of repossessed homes being off-loaded by banks and building societies.

The move opens the door to homeowners hoping to buy a property at bargain-basement prices.

A typical example is a one-bedroom Portobello flat boasting uninterrupted sea views, which is going under the hammer in Ayrshire next week after the owners defaulted on the mortgage.

Agents have set a guide price of 75,000, but similar properties in the same block have sold for up to 130,000 in the last 15 months.

David Alves, property manager at Edinburgh-based solicitor and estate agent Sturrock Armstrong and Thomson, said: "There are tremendous bargains for those who are buying. It is a good way of clearing a backlog of properties in the current market."

SA&T has been the agent for six houses that have sold at auction since June.

Among them were six-bedroom homes at North Gyle and Cramond that each sold for around 300,000 – around 25 per cent cheaper than similar homes in each area had sold for on the open market. A lot of the properties going to auction are new-build flats, many of them along Edinburgh's Waterfront.

Shaun Vigers, auctioneer and director at Edinburgh-based SVA Property Auctions, expects the number of homes being auctioned to rise, along with repossessions, over the coming months.

He said: "When the market was strong, I would probably be confident in saying that less than ten Edinburgh properties would come up (for auction) in a year in any form.

"More are appearing now and certainly you would not have seen two-bed flats in new-build developments two years ago – just the odd distressed right-to-buy former council house sale. Now, you see them up and down Western Harbour and other parts of the city. It is often new-builds built in the last two to five years."

Recent figures showed that 282 repossessions were granted during November and December in Edinburgh, compared to 50 in September.

On the day buyers successfully bid, they have to pay a deposit worth ten per cent of the price of the property. They then have to pay the remaining 90 per cent within four weeks.

A spokesman for Nethouseprices.com, which has opened a new auction listings part of its website, said: "Given the current market, property auctions are becoming a fantastic alternative to the traditional means of selling property."