More homes under the hammer predicted – London Wallet

An increase in mortgage defaults could see a spike in homes put up for auction, a lawyer has claimed.

Recent data from auction house My Auction showed 38% of all lots were former buy-to-lets as landlords sell up and exit the property market.

But Simon Nosworthy, head of residential conveyancing at Osbornes Law, believes the number of properties going to auction could also increase with more home owners defaulting on their mortgage because of high interest rates.

Nosworthy said: “Historically when mortgage rates rise some homeowners default on their mortgage and then these properties are generally sold at auction by the banks. 

“As a result, we could well see an increase in the number of properties being sold at auction, in addition to landlords selling their housing stock in this way. However, there are several factors people need to consider before buying a property at auction.”

However, according to Nosworthy, bargains are much harder to fund at auctions these days as most people have cottoned to the fact that this could be a place to potentially find a cheap property.

He also said that buying at auction is riskier than buying through an estate agent, but added it was “a quick and transparent process”.