2022 was a booming year across the entire property industry, with house prices soaring and agents run off their feet by determined buyers-to-be. This is echoed across the auction industry, with the number of lots sold and total raised growing on the 2021 figures for the first three quarters of the year. 2022 saw 28,514 lots sold and £5,807m raised in total
2022 was a booming year across the entire property industry, with house prices soaring and agents run off their feet by determined buyers-to-be. This is echoed across the auction industry, with the number of lots sold and total raised growing on the 2021 figures for the first three quarters of the year.
However, with political and economic turmoil came rises in the Bank of England base rate, which in turn had a knock-on effect on mortgage interest rates and other funding channels. Combined with the added energy increases and the cost-of-living crisis, the number of ready and able buyers slowly started to decrease.
Buyers began tightening their purse strings, lowering new offers or gazundering existing ones, while also trying to complete on sales before any finance offers at previous rates expired. Luckily, the auctions market was quick to respond, with sales staying strong until the end of the year, and the total raised managing to exceed 2021 figures until December.
The most commonly seen tenanted property in auction is the Terrace House, accounting for 22.5% of our total sample set. Nationally, we saw average yields of 6.2% for 2022, with 2 and 3 bedroom properties seeing slightly higher yields of 6.8%. In the residential sector, Flats and Apartments remain a popular choice, with average yields of 7.7% for 2022. One bedroom properties see higher than average yields, with national figures up at 9.3%. All standard houses (whether detached or otherwise) saw an average yield of 5.15%.
Typical investment properties in the form of HMO’s or Blocks have remained strong at 6.7%, and Mixed Use at 6.5% for 2022. Commercial properties have seen a slight drop overall from average yields of 9.4% to 8.5% from 2021 to 2022. In particular, retail properties dropped from average yields of 10.8% to 9.1% from 2021 to 2022. We will be covering more about commercial properties in a future PAD Report if this is of interest to you.
All properties included in this analysis were sorted into their primary investment type. This means for example that terrace houses only appear in the Terrace House category and do not appear in the House category. Houses that were advertised as multiple occupancy or are split into self-contained abodes are marked as HMO / Blocks. Commercial properties are those without any residential aspect listed.
Source EI Group – https://www.eigpropertyauctions.co.uk/news/pad/2023/q1