Strong demand for residential assets fuelled a 4.5% increase in overall UK auction revenue to £3.5bn in 2012 as investors favoured the sector over more finance-dependent commercial lots.
Figures compiled for Estates Gazette by Essential Information Group show a modest rallying in the commercial sector, with totals up by 0.2% to £768m – the first increase in two years.
Residential revenue increased by 5.8% to £2.7bn, continuing to reflect the growing demand for homes at auction.
Some 25,356 lots were sold in the UK’s auction rooms last year, a rise of 5.2% on 2011. There were 1,571 auctions held, an increase of 3.2%.
Allsop Commercial remained top of the commercial table, raising £337m. This reflected a 2% decline on its 2011 total, however. Its market share dipped by one percentage point to 44%.
Acuitus, Allsop’s closest commercial competitor, raised £152m during the year, a 5% increase on 2011.
Duncan Moir, commercial auctioneer at Allsop, said his firm’s 2012 performance was a reflection of the wider market.
He said: “The revenues from auctions are generally seen to be pretty static over the past 24 months, but volumes have increased. That is clearly an indication that the average lot size is on the decrease, reflecting the malaise in the wider market.
“What is encouraging to see is the increasing volumes that are coming through the room, as opposed to the private treaty market, which has seen a fairly dramatic decrease in volumes over the same period.”
While commercial lots may have fallen out of favour with investors who lack the necessary skill and access to finance to buy and manage them successfully, the popularity of residential lots has increased.
Gary Murphy, Allsop’s residential auctioneer, said: “There has always been a demand for residential property because the underlying factor, whether you are owning or renting, is that you will always need a home.”
Murphy doubts the shift away from commercial property will be permanent. “I think the commercial sector is suffering because of the lack of bank lending,” he said. “When the banks start to lend to commercial investors again and trade resumes, you will see our sales in the commercial sector take off again.”
Residential specialists Savills and Barnard Marcus, which ranked third and fourth on the overall 2012 league table, recorded two of the biggest hikes in revenue of last year, increasing total receipts by 29% and 30% respectively to £275m and £180m.
Savills auctioneer Christopher Coleman-Smith said 2012 was the year “the auction market recovered”.
“This year the whole market will be able to maintain the growth of 2012 and even increase on that,” said Coleman-Smith. “It is also encouraging to have seen the commercial market slowly pick up during 2012; good news for the market as a whole.”
samantha.baden@estatesgazette.com
