When lockdown was announced three months ago, auctioneers had to adapt extremely quickly to the circumstances and switch to holding auctions online. They did not fail and the auctions – normally called the heartbeat of the property market – have continued and kept the UK property market going.
The first month was a little clunky but we have since seen upgrades to the systems, introductions of 3D walkthroughs and floor plans that were never really part of the typical auction marketing. In fact, auction particulars, with the exception for commercial auction, had hitherto been rather basic.
From an operational perspective, auctioneers now have to handle much more admin prior to auction as every bidder has to pass the anti-money laundering (AML) checks and also pay the bidding deposit. Bear in mind that some lots attract well over 100 bidders who would normally just turn up to the auction with only the winning bidder having to go through the whole admin process.
The buyers seemed to have embraced the new online bidding very quickly also. We have seen a lot of competitive bidding and no bargains as predicted by many.
In this article, I aim to give you a breakdown of the forces affecting the auctions market (and arguably the whole property market) and finish off with some predictions of how those forces will shape the rest of 2020. Those predictions are not guaranteed to occur but I will be basing my buying and selling decisions on those until clear new evidence to the contrary shows up.
Supply of properties
The first month of the lockdown was a transitional time. Sellers who had their property in late March/early April auctions committed to selling before the lockdown and on the back of very successful February auctions. So, the stock levels in March and April were quite consistent. Late April and early May saw auction catalogues shrink to about a third of their typical size as only sellers who had to sell would have decided to enter during the lockdown restrictions. Late May and early June saw auction catalogues at about 50% capacity as confidence has started to return.