This is regarded as an indicator of more re-possessions due to people defaulting on their mortgage payments, and a sign of desperation to sell.
The latest figures from the Council of Mortgage Lenders found that repossessions rose to 18,900 in the first half of 2008, up from 13,400 in the second half of last year, the highest level of repossessions in more than a decade in the UK.
And figures from EI Group show that the number of properties on offer at auction has soared by almost 300% over the last three years.
There were 3,102 homes offered at auction in the first half of 2008, compared to just 799 in the first half of 2005. And repossessions now make up over 20% of the properties on sale at auction.
'Banks and lenders offering repossessed properties are often keen to secure a sale on the day and are less worried about achieving a high price,' said David Sandeman, managing director of EI Group.
It is good news for buyers. 'These properties are selling extremely well compared to other lots, with investors bagging some excellent deals. New build flats are also selling at huge discounts,' he added.
London and the Home Counties – Hertfordshire, Buckinghamshire and Berkshire – are the most popular at auction but buyers are rejecting properties that are not reasonably priced or that are flooding the market, causing Northern city centre properties in particular to go unsold.
It is not just in the UK that the number of auction sales is increasing. The latest figures from Mumbai, India also show a sharp upward trend as the credit crunch continues to bite in Asia.
According to property consultants in the city banks are disposing of around four to six properties a month, an unprecedented trend. 'The number may look small in percentage terms, but this trend of foreclosures is definitely on the higher side,' said Akshaya Kumar, chairman of Parklane Advisors.
Anuj Puri, chairman and managing director, Trammel Crow Meghraj said he expected the number of defaults to rise in the first quarter of 2009-10, leading to more auctions by banks. He described the number of defaults at this point of time as 'quite unexpected'.
