COVID-19 – Important Auction Information

Buyer demand unaffected by rising interest rates

27.04.2022

Despite a steady succession of interest rate raises being announced by the Bank of England, we are delighted to report our best-ever first quarter of the year.

Between January and March, we sold a record 892 properties. This marks a 6.5% increase from our previous best-ever first quarter last year.

Commenting on the figures, Managing Director Jeremy Prior said: “This is another remarkable set of figures from Auction House – especially considering the wider economic position the market was facing at the time. Since December, we’ve had three consecutive rises in the Bank of England base rate – from just 0.1% in December last year to a more substantial 0.75% now, taking it back to pre-Covid levels.

“These moves were mainly in response to a soaring UK inflation rate, which rose to 6.2% in the year to February 2022, up from 5.5% the month before. Many forecasters now believe that inflation could peak at a level higher than the 8% previously predicted.

“Ordinarily in such circumstances, you would expect higher interest rates to encourage people to save more because they get a higher return, and borrow less because it‘s expensive – especially for those on variable rate mortgage deals, of course.

“And yet this year, these interest rate increases don’t seem to have been affecting buyer demand, which has remained strong throughout. This may have been the first back-to-back increase since 2004, but it was also our best-ever first quarter and our best-ever March too.”

Compared to pre-pandemic figures, this year’s successes are even more marked. In March 2019, we sold 261 properties, whilst in March 2022 we sold 400 – an increase of more than 50% (52.3%). There was also a 14% increase in the number of lots sold in the first quarter of 2019 (781) compared with the first quarter of 2022 (892).

Jeremy added: “These figures only go to show the astonishing resilience of the auctions market. Even during times of upheaval, people continue to gravitate towards bricks and mortar.

“Continuing inflation means that we should expect to see further interest rate rises this year – perhaps as soon as the next meeting of the Bank of England Monetary Policy Committee meeting on 5 May. Nevertheless, we firmly believe the market will continue its robust stance, as it has during the first three months of the year.”

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