Like many other sectors, auction houses have headed exclusively online during the pandemic – and have made a huge success of it, with auction firms across the country reporting record levels of success and business.
It helped that many auction houses already had online systems in place, pre-pandemic, which made the shift from traditional in-room auctions to various online versions a fairly painless and seamless transition.
But will this be a long-term shift, and will Covid signal the end of the traditional auctioneer?
Kate Lay, director of Manchester-based Landwood Property Auctions – an auction house which specialised exclusively in online property auctions even before the pandemic struck – believes so.
“The impact of the coronavirus outbreak is being felt across all industries. It’s sweeping aside outmoded ways of working, while ushering in widespread efficiencies and improved ways of working. Easier, safer and more flexible for all concerned, it’s clear that online auctions are the future for the property auctions sector,” she argues. “Not only do they eradicate any safety concerns, but they also offer an experience far superior to the traditional model.”
She says the benefits of an online approach for buyers include greater transparency and fixed auction times ‘to avoid hanging around a stuffy auction room all day’. Buyers also get to place a bid when they choose to, ‘not when the auctioneer decides that they can join in’.
For sellers, she says the upsides include ‘no more waiting weeks for an auction date or panicking that you might miss the deadline’. Sales details, guide prices and reserves can all be updated regularly throughout the marketing to reflect any changes that may come about – meaning no ‘outdated printed catalogues’.
“At Landwood, we’re experts in this field – having held weekly online sales since our inception in 2018. We’ve never staged a traditional property auction and never will,” she says.
“Our tech-driven approach has seen us utilise digital auction technology that dispenses with any need for a physical auctioneer. It allows more bids to be taken in a shorter space of time – maximising potential returns for sellers and giving buyers more opportunities to secure a property. A recent sale saw us receive 16 bids in under 30 seconds and no physical auctioneer could possibly register that many bids in that short space of time.”
She adds that, by holding sales on a weekly basis, the auction house can actively engage with potential buyers for longer and deliver better returns for clients.
“It’s an approach that consistently delivers impressive returns for sellers and a seamless experience for buyers,” she argues.
Lay also believes the traditional auction process can result in properties not reaching their full sale potential, with a set amount of time allocated per property so the auctioneer can get through the list of registered lots on that particular day. This means lots have to be moved on for further sales to take place, she adds.
“Through lockdown we’ve seen record numbers of bidders drawn to our way of working – with sales likely to hit £25 million by the end of the year,” Lay claims. “Our platform has also consigned the traditional summer lull to history.”
She says traditional auction houses scale back or halt operations entirely between July and September ‘as the industry puts its feet up’.
“But, through maintaining our timetable of online-only sales every seven days we hit new sales highs in August and have seen continued success throughout the autumn.”
Lay argues that the ‘old-fashioned auction houses are, of course, attempting to play catch-up’, with many operating a hybrid model – ‘essentially trying to replicate in-the-room auctions digitally’.
This, she says, misses the point entirely and makes no use of the technology now available. “It offers no benefit to either buyers or sellers,” she insists.
“There’s no doubt about it. The industry has reached a watershed moment. It’s time to face facts – technology has now made traditional auctioneers entirely surplus to requirements. They’re going, going…gone.”
Traditional auction houses would no doubt make the counter-argument that they, too, have headed fully online during Covid – and fully embraced this change, with our auction roundup regularly highlighting record sales for firms more used to the in-person experience.
But is Lay right in saying the traditional auctioneer is dead, or will the prospect of a vaccine and a potential reduction of social distancing rules at some point next year bring the in-person auction experience roaring back?
Only time will tell.
This post has originally been featured in Property Investor Today.