The end of the year will see a sharp increase in the volume of repossessed properties being sold at auction, according to an auctioneer.
Edward Swindells of Swindells Auctioneers is expecting a 20 per cent increase in the number of repossessed properties coming to auction in the three months to December.
That’s because of a seasonal trend in asset managers attempting to quickly sell any property that has failed to attract a buyer on the open market earlier in the year.
Swindells says this increase in lower value stock will be responsible for an overall reduction in average property values, which may be mistaken for a general cooling off in the market.
The auctioneer also suggests the increase will attract a large number of so-called “flipper” investors who will purchase these properties in bulk, then resell them at auction in spring 2015.
But he’s warning this strategy may not deliver the profits of previous years due to the possible interest rate hikes.
“The kind of investors who are typically attracted to this sort of property would be well advised to adjust their expectations in terms of how profitable it may be when they come to resell the asset next year,” he says.
“Contrary to popular belief, we still think that interest rates could rise slightly before the end of the year as consumers embark on their Christmas spending sprees and the Bank of England has more confidence in the overall economy.
“Therefore, investors looking to turn a fast profit from low value property bought at auction over the next few months may have to hold onto it for longer than expected.”
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