I have never had a bidder like you,” shouts the auctioneer to a young woman at the far side of a packed hotel conference room in Kensington, west London. “What’s your name?” “Lucy,” she replies, barely visible among the rows of would-be buyers. Lucy has spent the past 10 minutes bidding fiercely for a rather ordinary-looking four-bedroom semi in Romford, Essex. The property, being sold on behalf of the Metropolitan Police, is in need of modernisation, and has a guide price of £175,000.

Lucy’s enthusiasm proves to be in vain, however. Every time it looks like as if she is about to secure the house, a hand goes up — prompting gasps from the room. The house eventually sells to a man for £244,000.

The Palace Suite in the Royal Garden Hotel is full of young professionals and parents with their children in tow, rather than the hard-bitten investors who predominated this time last year. The atmosphere is very different, too. Last autumn, many of the properties on offer failed to reach their reserve prices — the undisclosed minimum amount the seller is willing to accept — and were withdrawn; this time, it was fewer than 10%.

“A lot of the people I’ve spoken to today say they came wanting to buy, but couldn’t even get their hand up before the bids were pushed out of their price range,” says Russell Taylor, an auctioneer at the estate agent Savills, which held the sale. “Buyers are going for properties straight away — they’re not messing about or hesitating.”

Analysis by the Essential Information Group (EIG), which monitors auctions across Britain, shows that, on average, more than 70% of lots at auctions in the past eight months have sold: below the long-term average of 75%, but significantly higher than the 53% rate seen in June last year.

In large part, this reflects the upturn in the broader housing market, which has seen prices rise sharply over the past few months, thanks to low interest rates and a shortage of stock. “This time last year, 35% of all residential lots were repossessions, but now these account for fewer than 10%,” says David Sandeman, managing director of EIG. It has also helped that owners have been more realistic when it comes to setting reserve prices.

The type of property available at auction has changed, too, with more attractive homes appearing alongside the traditional auction fare of derelict barns and run-down flats above kebab shops. “The quality of lots has gone up and they are, on average, more valuable,” says Gary Murphy, partner and auctioneer at Allsop, the largest auction house in the UK. “But prices are also increasing in line with the price index.”

This has helped fuel the excitement in the auction room. Fast forward a few lots from the Romford house and a redundant church in Egham, Surrey, without planning permission, sells for £275,000 — £100,000 over the guide price.

A few properties later, the couple next to me start cheering. They aren’t bidding, just enjoying the show, as one buyer successfully beats off competition from someone joining in on the phone.

For every winner, there are several more frustrated bidders forced to give up, as the house of their dreams moves out of their price bracket. Stefan Farrelly, 37, a veterinary scientist, has been trying for more than six months to buy his perfect Victorian terraced home. The closest he has ever come to success is when his three-year-old son was cautioned by the auctioneer for rogue bidding.

“I’ve been to about four auctions, although I still consider myself new to them, as I’ve never succeeded in buying anything yet,” he says. This time, he has his eye on a house in Forest Gate, east London, listed with a guide price of £145,000 — but he is outbid yet again. It goes for £160,000.

“It’s a bit nerve-racking,” he says. “The problem is that everyone is trying to get something at auction these days. The TV shows all tell you that anyone can have a go at doing it. But there is so much competitive bidding that this isn’t the case, and the whole process takes much longer as a result.”

So are auctions still the best place to buy property at a discount, or would you be better off going through an estate agent and trying to haggle down the price? Precise comparisons are difficult: an unmodernised Victorian four-bedroom house in Wimbledon, southwest London, sold at last week’s Savills auction for £432,000 — £37,000 more than the guide price, but £50,000 less than the cost of a comparable property in an estate agent’s window. On the other hand, prices for four-bedroom semis in Romford start at £220,000 — suggesting that Lucy might have done well to withdraw from the bidding.

A man who paid £81,000 more than the £360,000 guide price for an unmodernised three-bedroom house in Herne Hill, southeast London, is convinced he’s got a bargain, however. “It’s actually very cheap, even at that price,” he says. Indeed, similar-sized properties in the area can fetch significantly more.

Simon Hichens, assistant manager of the local branch of Oliver Burn, a south-London estate agency, is familiar with the house and agrees. “I know the road, and I would be surprised if the house didn’t sell for £500,000 on the open market,” he says. “There was a similar property near it that had an offer of that amount, which the owner still rejected.

“Overall, I see that people are getting frustrated with the lack of properties available to buy, and are turning to auctions. This means the margin between what things can sell for at auction and through agents is smaller — auction prices are catching up, even though they are still cheaper.”

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