October spend spurs recovery talk

  Spending at UK auctions in October increased by 20% year-on-year to reach £420m, according to figures from the Essential Information Group.   A total of 3,038 commercial and residential properties were offered for sale last month, of which 2,187 sold, reflecting a 72% success rate.   This compares with the 3,607 lots offered in October 2008, which saw 61% sold and raised a total of £313m.   Total sales for the year from November 2008 to October 2009 came in at £3.4bn, a 19.5% drop on the same period a year earlier.   Amounts raised through commercial sales were up by 40% to £178m last month, compared with £127m in October 2008. The overall success rate reached 74%, against 67% a year earlier.   Success rates also continued their recovery in the residential sector, closing at 71% against 63% a year earlier, but numbers of properties being offered and sold drifted down by 18% and 8% respectively, partly reflecting the sharp reduction in levels of distressed sales.   Richard Auterac, joint head of auctions at Jones Lang LaSalle, said: “This presages what is about to happen in the auctions market. There has been a veritable explosion of instructions on the commercial side.   “The turnaround at auction began in the summer, and vendors are starting to take advantage of the strong prices being achieved on prime property. Some owners have been astounded by the prices that are being paid at the moment.”   He added: “Prices for prime stock are largely not back to 2007 levels, though they may be in one or two places, including bank investments. For the majority they are around 10-20% below what they were two years ago at auction.   “What we are not seeing, however, is a return in volumes of secondary stock because people cannot get the loans they need to finance them, so ‘recovery stock’ is not being sold at present.”   The latest EIG figures back up the ARAS/IPD findings for Q3, which showed commercial auction sales were twice those of Q3 2008 (24 October, p75).   A regional analysis of auction sales by EIG shows the recovery in London trade is continuing. Revenues from the capital’s leading auction houses grew by 59% in the three months from August, closing at £219m, up from £137m, but fell by 14% in the South East and Home Counties to £105m, from £122m.   For a full breakdown of regional results go to www.eigroup.co.uk   estelle.maxwell@estatesgazette.com