Blog Post

How will the rise in interest rates affect auctions?

Publish Date: 23 August 2022

By Jade Shrubsole

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Further reading

Bank of England eases rules on borrowing and 95% mortgages still available until December 2022.

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How will the rise in interest rates affect auctions?

We have now seen the sixth consecutive interest rate rise, this time by 0.5% to 1.75%. In auctions we have seen that although the total number of lots is down, the total amount raised has actually risen by 3.2% this July.

With interest rates rising there is an obvious fear among buyers. Mortgage payments are rising, the affordability of homes and getting on the ladder is seeming harder than ever. However at present even with the rises, we are yet to see a fall in property prices within the auction market.

Auctions are a good barometer of the market sentiment and have always been quick to respond to market change with vendors reducing reserves quickly. It will be interesting to see over the coming months whether reserves will need to be adjusted to represent the change in the market.

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