Auctions’ online route to growth

To many, the buzz of an auction room is addictive. For a few seconds your property is subject solely to the whims of market forces – and the skill of an experienced and wily auctioneer. The popularity of TV programmes such as Homes under the Hammer demonstrates the appetite the public has for the auction as a “spectacle”. But with online auctions a growing force, is the auction room under threat? With 34 auctions across Birmingham, Chester, Coventry, Derby, Leicester and Nottingham, raising £130m so far this year, we think not. This is not surprising. But SDL Bigwood does see a role for online auctions and we are keen to promote them alongside our traditional auctions as they can complement each other and ultimately build a bigger market for all. That is why we have launched our own online auction portal. While we remain fully committed to our thriving and long-established traditional approach, our clients can also buy and sell properties online at any time. As in the auction room, the process is fully transparent and concludes with a binding legal sale. The beauty of online auctions is that the client can choose an auction date that suits them and they can choose the timeframe that suits them. Online auctions can start whenever you want, so you don’t have to wait for a specific date to sell a property. You still set a reserve and benefit from the expertise and advice of auction house staff members and when the price has been achieved exchange can be immediate. A significant benefit of online auctions is that they can easily reach out to people nationally and even internationally, which gives vendors great potential to attract interest from prospective purchases from much further afield. Selling by online auction avoids price negotiation and sales falling through, which are the biggest flaws with the private treaty method of selling. It means dealing with motivated cash buyers and allows for greater flexibility – and at the same time you can still tap into the national and international marketing expertise of a major auction house. Selling by auction is black and white – it either sells or it doesn’t and takes out of the process a lot of the stress and anxiety associated with sale by private treaty. The technologically astute buyer – which means most people these days – can search, download legal documents, arrange viewings and place bids on properties, in their own time. Sellers have control over the sale process. Buyers have more access and opportunities to buy property, with auctions taking place on a daily basis. We do not believe that online auctions will ever wholly replace the excitement of the auction room, the testosterone and the thrill as two or more protagonists battle it out well past the reserve that just seconds earlier we wondered whether would ever be achieved. However, the pace at which the public is accepting technology is accelerating. Online banking, gambling, booking dental appointments, Christmas shopping – you can watch people doing this on their phones on any train or bus on a daily basis. Online auctions are part of this trend. Rather than the larger established auction houses being under threat from online sales, I think it is more likely that the traditional high street process of sale by private treaty will be affected. At present, about 3% of all properties sold in the UK are sold under auction conditions and I expect to see this increase significantly once the public becomes both familiar and more comfortable with online auctions. As those who woke up in the UK on 24 June and in the US on 9 November will attest, predicting the mood of the public is a mug’s game. But could 10% of all UK property transactions be via some type of auction disposal by 2020? I certainly hope so. Rory Daly is chief executive of SDL Bigwood