In part one, we spoke to a number of high-profile auction houses about how they see the sector’s post-lockdown future. Here, we speak to more major players, to further understand how the industry might look after Covid.
When lockdown came into effect, Clive Emson Auctioneers decided to move all of its auctions online. The decision wasn’t taken lightly, as it knew a big part of the auction experience is being able to attend and participate on the big day itself.
However, while there were discussions around the possibility of hosting socially distanced auctions, the firm felt the logistics of doing so would make managing the auction a difficult and less inclusive experience for all.
“More importantly, with the normal number of attendees, as well as the issue of needing to sign contracts, we would not be able to guarantee the safety of both our staff and visitors,” James Emson, managing director of Clive Emson, says.
The feedback for the online auctions has been great, though. “We are overwhelmed with the positive response we have received with the move to online. We understand for many that it could be difficult to get accustomed to the change, which is why we aim to make the process as easy as possible.”
Once registered online, all lots are easily accessible, with all the relevant documentation and information to browse before auction day itself. Once the day arrives, meanwhile, users can place bids on the lots as they wish at the click of a button.
In terms of sales, the company says its online auctions have performed remarkably well. Its May auction saw lot sales of over 70%, while its June auction saw a total of 85%.
But what are the next steps? “As lockdown begins to ease and as many businesses are once again opening their doors, we have discussed whether now is the right time to return to our traditional auction methods,” Clive Emson said.
“After much deliberation, we have decided that we will be continuing our online auctions into September (Clive Emson’s next auction date). While an ease of lockdown is certainly a positive change, the need for social distancing is still required. As a result, managing an auction would prove logistically difficult, as well as potentially putting many people’s lives at risk.”
Birmingham-based Bonde Wolfe Auctions, which covers the whole West Midlands region and specialises in selling residential, commercial property and land, has always live-streamed its in-room auctions and purchasers have always been able to bid remotely via telephone, internet or proxy.
“In many ways, therefore, the way we’ve gone fully remote because of Covid-19 restrictions is only an extension of this,” Gurpreet Bassi, chief executive of Bond Wolfe Auctions, says.
The company recently held its latest ‘impressively successful’ remote auction on Wednesday 29 July and has still experienced ‘huge demand in a thriving market’ despite the challenges faced, and the major change Covid-19 has brought about for all auction houses.
At that last auction, remote bidding raised over £16.3 million in sales with a success rate of 95%, as well as more than 33,000 people watching the auction live. More than 72 legal documents were downloaded to view the 170 lots offered.
“This clearly shows that as a business, Bond Wolfe Auctions’ staff have adapted brilliantly to these strange times, and many of the new processes and systems that we have implemented we will carry through when things become more ‘normal’,” Bassi adds.
“In short, I think that the future of auctions will become a hybrid of the ‘old way’ and the way in which we are currently operating, as we may see more bidders choosing to bid from the comfort of their homes or offices.”
But does Bond Wolfe have plans to return to traditional in-person auctions anytime soon? “Although our ‘behind closed doors’ auctions have produced some amazing results, I still don’t think that you can replicate the buzz of a full auction room. We therefore want and believe that we will return to in-room auctions at some point in the near to medium-term future. But we have no dates yet, and will only consider any dates when it is fully safe and appropriate to do so.”
Has there been any guidance from NAVA or the government about when this might be the case? “There’s been plenty of advice from them on how to operate during the pandemic, but no-one yet knows exactly when and how traditional in-person auctions will be safe again,” Bassi says.
“That’s the same for any business sector that involves large numbers of people in the same room. Does anybody really know when it will be safe to fully resume traditional operations?”
He adds: “In terms of guidance, we are constantly assessing all government and NAVA advice and updates as they come out, and we will respond with adjusted or new plans as soon as we can. However, the first consideration for us has always been the safety of our staff and the public, and this will continue to be foremost in our minds.”
The Watford-based auction house, which sells homes across the country, has found that buyers are quickly adapting to the convenience of online auctions.
“The mass migration online is the biggest change the auction market’s seen since the Sale of Land and Property Act of 1867 required bidders be notified when a property was to be sold subject to a reserve,” Toby Limbrick, director at Network Auctions, says.
“An online auction might not recreate the buzz and excitement of a live room but it’s a transparent and efficient way to conduct business and our buyers and sellers have embraced it. Network Auctions have no plans to return to live auctions for the time being.”
But is there strong desire from consumers to return to in-room? Or are they happy to carry on remotely?
“We offered phone and proxy bidding as an alternative to online at the start of lockdown but there was no take-up. Every lot we’ve sold in the last seven auctions was to an online buyer,” Limbrick explains.
“It’s straightforward to register and bid and the feedback has been overwhelmingly positive – not just from new buyers but from seasoned auction investors, too.”
Limbrick has been impressed with the support and advice provided to auction houses during the pandemic from NAVA, with the trade body reacting quickly with relevant advice whenever government guidance has been issued to the sector.
After Network Auctions’ mid-July sale, which achieved an 82% success rate and raised £2,295,200, Limbrick said that ‘online is proving its viability’.
“Before Covid-19, online was starting to take hold, but now with buyers unable to travel to the auction room, we’re seeing a continued upsurge and also a preference for this method of auction,’ he claims.
“Buyers enjoy the convenience of being able to bid online. In our recent sale we saw 394 individual bids – an average of 18 bids per lot sold. This also works well when the properties are geographically spread; we offered lots from Dundee to Exeter.”
The sale included a freehold residential development site with outline planning for 4x detached dwellings in Woore, Cheshire, which sold for £202,500 against a guide of £150,000.
“The virus has ushered in changes which were already in the offing and are now bearing fruit. People continue to want to invest and we are providing the tools for them to be able to do that,” Limbrick concludes.
<!– –> This post has originally been featured in Property Investor Today.