Used car prices rose 8.8% month-on-month and 8.1% year-on-year at auction houses across the UK during July despite a lower first-time conversion rate indicating a greater level of available stock, NAMA has reported.

In its monthly summary of the performance of the auction sector the National Association of Motor Auctions (NAMA) reported that the average sale price of a vehicle offered at auction had risen by £473 from June 2017 and £438 from July 2017.

Head of NAMA, Louise Wallis, said that auction activity had been “buoyant in 2018 so far”, with an estimated 5.5% increase in the volume of cars being sold compared to last year.

But she added that an increase in the volume of stock entering the market had been more than sufficient to sustain the higher volumes, adding: “The first time conversion rate was -3.4% lower than a year ago, indicating that stock availability was greater this year.”

NAMA’s report showed that the first time conversion rates decreased by 1.4% to 76.1% from June to July, and decreased 3.4% on July 2017.

The first time premium was £318, up on last month’s figure of £220. Premiums for first time sales for both petrol and diesel cars were up by £109 and £310, meanwhile.

Diesel converted at 76.7%, down 0.6% on last month.

NAMA said that there remains a significant gap between the average sale price of petrol and diesel cars – at £4,202 for petrol and £7,347 for diesel – but acknowledged that this was an indication of the different model mix represented by each fuel type.

Wallis said that, despite more units being sold across auction channels in July, the volume of cars between 2.5 and 4.5 years of age fell by 2.3%.

She said: “These would typically have been ex-contract hire and lease cars where purchasing new vehicles has been delayed because uncertainty with the new vehicle emission testing.

“Hammer prices have been strengthening in recent weeks as fresh stock has been reducing, which is anticipated to continue throughout August.

“Although more volume is expected in September due to plate change activity, it doesn’t usually build up until the third week of the month, so strong hammer prices are expected well into September.

Stuart Pearson, NAMA’s vice-chairman, added: “Whilst demand softened slightly, the seasonal shift was expected with the start of the summer holidays and hottest summer on record since the 70’s.

“There was a focus around year on year value improving which highlighted the underlying strength of the used vehicle market this year.

“With the upcoming ‘plate change next month, there is a requirement to take into account the condition, age and mileage of vehicles”.