Auction property prices 'down by 23%'

The average price of a house sold under the hammer has dropped over the past year, the Liberal Democrats say.

Between June and August, 3,993 houses were sold at auction and the average price they fetched was £130,400, down 23.4 per cent from the same period last year, the Lib Dems treasury spokesman Lord Oakeshott claims.

"Suspending one per cent stamp duty is like standing in front of a runaway train," he said.

"It is pointless at best and could be downright dangerous if it ends up sucking vulnerable first-time buyers into negative equity."

The building industry could be saved from collapse if the government helped councils and housing associations to buy unsold land and homes, Lord Oakeshott advises.

Furthermore, banks should be steered away by the government from repossessing property unless this option is the last resort.

Over the last three years, the percentage of repossessed houses up for auction has reached nearly 300 per cent, auction experts at the Property Investor Show in the south east say.

There will be more bargains available on the market if prices continue to fall, managing director of the show Nick Clark concludes.