Is it me or has the world gone crazy? Let us get the ‘mess’ out of the way nice and early! Covid-19, Stamp Duty holiday, looming potential crash out of the EU, government enforced prevention on evictions, government enforced prevention of repossessions, CVA’s (Company Voluntary Agreements), interest rates, high street banks (& challenger) lending guidelines tightening , the amalgamation of use classes (planning and permitted development) and mounting unemployment figures. I am certain I have missed a tonne of other factors, but these are the ones that sit at the forefront of my mind when I consider the current market.
Looking specifically at the auctions, the impact of Covid-19 has been really very easy to see; the traditional in-room auctions have migrated to the online auction arena. For some this has been an opportunity to reach out into a new market, disrupt it and in some cases take over the medium altogether. Online auctions are considered the future of property auctions, whilst for others they are being used as a stopgap until the in-room auctions return.
This level of change in the market has created as much opportunity as it has created disruption. The auction dynamics have shifted and there are elements of this that are likely to remain in place for the in-room auctions when they return to normal after the Covid-19 pandemic is over and restrictions are lifted/eased.
The different flavours of online auctions
Due to the pervasive power of necessity and change, the traditional in-rooms auctioneers had to adapt and, in some circumstances, have innovated and optimised the online auction process.
The standard online (pre-covid) auctioneer comprised a handful of relatively known and fantastically obscure operators. Unimaginatively, all offering and operating in a similar and semi-acceptable manner.
The basic eBay style bidding window with all fees to the buyer seems in hindsight to be a draconian service and mode of operation. Fast forward to March 2020 and the old eBay style was replaced with a more intuitive and dynamic bidding window and function. In the main, the buyer’s fees and premiums under this new model have remained relatively unchanged by the traditional auction room providers.
Under the old guard, the buyer’s fees and premiums could exceed £5-8,000 for a property purchase priced at £40,000-£100,000 and some of the worst offenders charging a percentage of the purchase price in addition as a buyers fee. Let us not confuse these with any additional/ supplemental fees in the legal pack.
