In recent days we have been exploring the future of property auctions with a number of major auction houses across the UK.
Here, in the final part of a three-part series, we speak with SDL Auctions, Mark Jenkinson & Son and online-only auction house Landwood Property Auctions for their thoughts on the auction sector post-pandemic.
Andrew Parker, auctioneer and managing director at SDL Auctions, which has one of the largest property auction networks in the UK, says lockdown has helped the firm move from a regional auctioneer to a national market leader.
“In July, we raised £20.7 million for landlords and property owners in the UK, with 170 properties sold across the month.”
He says SDL Auctions is now the UK’s most successful live-streamed auctioneer, ‘an outstanding achievement and one that highlights how the changes we’ve made since lockdown began have enabled SDL Auctions to go from strength-to-strength’.
From March, SDL launched its live-streamed national property auctions. “We have been broadcasting our auctions live on our website for over ten years so this was nothing new to us and we already had the measures in place to switch to a behind closed doors model,” Parker explains.
“It meant our customers saw little difference in the way our auctions operated; they continued to see an auctioneer on the rostrum taking their bids, however they simply cannot attend our auction rooms.”
Parker says that holding monthly national property auctions, alongside existing single-lot online auctions, has uncovered benefits to SDL Auctions.
“It’s allowed us to now reach huge audiences and draw lots from a much wider geographical area than before. It breaks down locational barriers and gives sellers access to a wider pool of buyers across the UK.”
At a recent auction, SDL achieved sales from across the whole of the UK, including properties as far north as Cumbernauld in Scotland and as far south as Plymouth, with lots more in between spanning England and Wales.
“Plus, with a simple process for placing an internet, telephone and proxy bids, our buyers don’t have to take a large chunk of the day out to physically visit an auction room. This in turn has made auctions more accessible to a new audience and we are finding we now have an average of 10 bidders per lot.”
He believes that, with the figures being raised for sellers, the online method should clearly have a big part to play in the future of auctions.
“Of course, there will always be a place for traditional room auctions – and many miss the atmosphere created in those settings. But we are excited to see how in the future the two will work alongside each other,” Parker adds.
“At this point, we don’t have any immediate plans to return to physical auctions but when we do, it will be measured and with the safety of all our customers and partners as the number one priority.”
Mark Jenkinson & Son
Adrian Little, auctioneer at Mark Jenkinson & Son, a Sheffield-based auction house and property firm, said that online has worked very well for the firm so far and its September auction, its sixth of the year, will be the fourth to enable bidding via its website rather than live at its usual venue of Bramall Lane in Sheffield.
“The success rate has been almost 100% and the prices achieved have been very strong across all property types,” Little says. “In our July auction, I offered an industrial ground rent for Hull Council with a guide of £400,000 – bidding was incredible and closed on £757,000, well above all expectations. Bidders were from all over the country, with the successful north-based buyer outcompeting London rivals.”
“Just as we adapted to the online process, bidders did also,” he adds. “A friend bid for one lot, unsuccessfully, whilst in a canoe on holiday in the Lake District!
Little says there were a couple of lots that he knew could have done better at a live auction, given the rivalry between certain individual investors. “We all know the atmosphere and power struggles that go on and it is common to see the outworking of this in the auction room. This cannot be replicated online, neither can the spontaneity that is seen as last-minute decisions are made on a ‘hunch’ or resulting from encouragement or even provocation from others in a busy auction room.”
He belives the online option is working, though, and is most grateful to be able to continue serving clients by providing them with such an effective option.
“However, our auctions are an event in the regional property market, and pre-Covid we made it a social occasion by having a pre-auction lunch for solicitors, bankers and people in the industry,” Little explains. It is a perfect environment for networking and new work comes as a result – not just auction jobs but professional work for our seven Chartered Surveyors.”
He says that, while face-to-face interaction may not be possible at present, as human beings we are wired for relationships. And, as an auctioneer, he wants a room full of eager buyers, to create atmosphere and take advantage of the local rivalry that exists amongst local and national investors.
“It’s what auctioneers do. It’s what my dad did decades ago with livestock and as a method of sale – whether property, fine art or sheep! – I look forward to returning to traditional auctions when safe to do so. In the meantime, [I look forward to] continuing to embrace the online method.”
Landwood Property Auctions
The Manchester-based auction house specialised exclusively in online property auctions even before the pandemic struck, so unsurprisingly believes that online auctions will be the new normal.
Kate Lay, director at Landwood, says online auctions are ‘easier, safer and more flexible for all concerned’.
“It’s clear that online auctions are the future for the industry. Not only do they eradicate any safety concerns, they offer an experience far superior to the traditional model,” she argues.
“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. They 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.
“During marketing we offer a far more proactive approach that reacts to interest levels. We offer a service that suits our clients and we can be flexible to deliver across a varied range of sale requirements.”
Landwood has held weekly online sales since its inception in 2018. “We’ve never staged a traditional property auction and never will,” Lay claims.
She says Landwood’s tech-driven approach has seen it develop its own unique way of working, with a platform that dispenses with 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 50 seconds totalling £31,000.”
By holding sales on a weekly basis, she says the firm 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.”
Through lockdown, it has seen record numbers of bidders, driving sales past the £11.5million mark since March.
“Unfortunately for some, the future looks challenging – lack of clarity from the government and absence of industry support hasn’t helped. Traditional property auctions have been on the way out for a long time, the coronavirus outbreak is only accelerating the inevitable,” Lay concludes.
<!– –> This post has originally been featured in Property Investor Today.