The UK property auction market recorded £5.9bn in residential and commercial sales during 2025, up from £5.5bn in 2024, as repossessed homes now account for more than 20% of auction stock, according to Essential Information Group.
The increase follows a rise in mortgage repossession orders, which reached 14,025 in England and Wales in 2024, the highest level in five years. Industry professionals attribute the trend to higher mortgage rates and cost-of-living pressures affecting homeowners.
Repossessions drive auction activity
Alex Greaves, a property buying agent at Ridgestone Property, confirmed that repossessed properties appear at auction weekly. While he does not anticipate a surge in distressed assets comparable to the financial crisis, he has observed an uptick of repossessions in central London.
At a recent auction held at the De Vere Grand Connaught Rooms in central London, 300 properties from across England and Wales were listed. Sales included a one-bedroom basement flat in Pimlico for £450,000, a four-bedroom townhouse in Wapping for £800,000, and a Devon bungalow for £327,500. Auction houses typically add a buyer’s premium of 2%-5%.
First-time buyers enter auction market
Estate agents report growing interest from younger buyers and first-time purchasers seeking properties in short supply. Liam Gretton, an estate agent in Wirral, Merseyside, noted that auctions no longer primarily feature distressed properties, with higher-quality homes increasingly sold through this channel.
Alice Helps, 26, purchased a three-bedroom semi-detached house in Somerset at auction in April 2024 for £178,000, above its £145,000 guide price but below her £200,000 budget. Helps, who participated online during her lunch break, described the experience as overwhelming but said auctions provided access to properties she could not otherwise afford.
The shift in auction demographics comes as affordability challenges continue to affect tenants and buyers across the market. Meanwhile, regulatory changes affecting landlords have also contributed to shifts in property ownership patterns.
Market composition changes
Properties listed at auction now include homes sold by housing associations facing financial pressures, alongside traditional repossessions. One boarded-up property in north-east England was listed with a guide price of £1.
During one auction, a woman present in the room attempted to halt bidding on her home of 20 years in north-west London, stating she was trying to resolve mortgage arrears. The property sold for over £400,000 despite her protests.
The composition of auction sales has shifted geographically, with properties in southern England outside London and the East Midlands featuring prominently. Many are described as family homes requiring renovation but otherwise habitable.
The auction market’s growth reflects broader pressures in the housing sector, as mortgage holders face higher borrowing costs and housing associations contend with debt challenges. Industry observers expect repossessed properties to remain a consistent feature of auction catalogues in the coming months.
