Property auction industry update 2021
The COVID-19 pandemic has influenced huge changes in the property industry and many of the processes involved therein – from house viewings and surveys to the office-based activities of estate agents and other real estate specialists.
The need for a reduction in in-person transactions, the importance of social distancing and the requirement for all “non-essential” businesses to temporarily cease trading has meant that certain real estate specialists have had to find ingenious ways to keep their processes going.
One area of the property sector that has been particularly transformed is the auction. With many of these events taking place “ballroom” style in the past, involving the gathering of many people in one space, the risks inherent in activities of this kind are clear in COVID times.
Now, as restrictions are being tentatively lifted by the UK government after the most recent Winter to Spring lockdown, what is likely to change in the world of property auctions?
Initial restrictions
During the original lockdown that began in March 2020, property auction firms were deemed “non-essential”, and in-premises trading was halted.
Property viewings, however, were able to continue – with the proviso that social distancing was adhered to and other suitable precautions were taken.
Online auctions, too, continued to operate, allowing this area of the market to push on despite the challenging climate.
Current processes
As of 8th March 2021, England continues to operate under slowly lifting national lockdown restrictions, meaning that all in-house auctions – except those facilitating sales of livestock and agricultural equipment – remain closed.
Should the gradual reversal of the lockdown continue successfully, however, auction houses may be permitted to reopen from 12th April – but no earlier.
For many major UK property auction houses, however, the move to online bidding has been highly successful.
So, to mitigate any risks that may come as a result of inviting individuals from a wide range of age groups back to ballroom-style events – they have chosen to continue to hold only virtual auctions for the remainder of 2021.
Auction houses such as Clive Emson have totally embraced the ease and safety of online auctions. The firm’s Managing Director, James Emson, recently stated: “A year on, even the most cynical are making the most of the freedom and results online auction are providing.”
“We have seen a massive, unprecedented shift from the traditional ballroom to purely online auctions, something none of us would have predicted a year ago.”
Online sessions still allow for real-time bidding, retaining the excitement and energy of a traditional ballroom auction.
James Durr, co-founder of online auction provider Property Solvers’ agrees with this sentiment: “we now offer both traditional 28-day auctions and modern method 56-day auction sales which has opened up the market much wider than was previously the case. The pandemic has served to boost both buyers and sellers confidence in in the online auction process.”
New tools
This move to online sales has been supported by the increased ease of producing and signing legal documentation over the internet. Paperwork is digitised, uploaded and downloaded by the relevant parties – making everything streamlined and safe.
Auction houses have also followed estate agencies in their adoption of virtual viewings. Film or 3D renderings of property “walkthroughs” are shared online along with other relevant property information.
This helps potential buyers to get a clear impression of the layout and condition of a property before they place a bid – without having to visit the location in person.
Remote viewings, auctions and exchange of paperwork has led to an increase in attendee numbers and has seen this form of property sale going from strength to strength during a time which, for many, has been hugely challenging in all other respects.
The future of property auctions
It is difficult to determine precisely what property auctions will look like in the future. The success of the shift to online bidding has been significant, which suggests that at least some of the elements that have been adopted will remain in use even after restrictions are lifted.
Of course, there is the question of COVID-19’s ongoing impact on business as a whole. Should the gradual lifting of restrictions be completely successful, there is the chance that in-house and face-to-face activities will be permitted to resume across sectors.
However, it is likely that many organisations will have learned valuable lessons as a result of the challenges and setbacks of the pandemic. The way in which certain activities are undertaken may remain permanently altered to reduce any future risk.
This makes it even more likely that remote processes will be the way forward for property auctions – along with many other areas of the real estate sector.
Again, however, we will only know of these changes and adjustments for sure as we come closer to better understanding the nature of a post-pandemic world.