Virtual auctions rule the roost as pandemic trend now permanent

The vast majority of auctions - widely regarded as a favourite for buy to let investors acquiring properties - are now taking place online.

NAVA Propertymark, the auction wing of the trade body, says some 76 per cent of auctioneers responding to a recent survey suggested the significant majority of events took place online. 

A statement from the trade group says: “Though numbers are tight, this suggests that a more permanent move away from ballroom may be imbedding. The rise in popularity of online can be linked to the pandemic and the advantages in terms of cost and inclusivity.

“In-person viewing of lots remained the most widespread method used by auctioneers. Still imagery overtook video this quarter in popularity. Again, numbers are tight, and it will be interesting to see how this changes over the coming quarters. 

“With 97 per cent of auctioneers reporting they use in-person viewings where possible, it seems imagery and video have no prospect of replacing the chance to see the lot with your own eyes.”

The survey has thrown up another issue - that is, several responses related to obtaining payment from buyers post-auction.

Non-payment for purchases not only increases the administrative burden on auctioneers and vendors in preparing for sale again, but purchasers - who do not pay what they promised - can be sued. Settlements can end up being even more than the original cost. 

Propertymark says: “Purchasers should be aware of all the costs involved in buying at auction – the final hammer price is not the total price paid.”

Nathan Emerson, chief executive of Propertymark, comments: “Our latest report has revealed that online auctions, particularly non-live formats, have gained popularity and surpassed traditional ballroom auctions, indicating a potential long-term shift away from in-person auctions.

“Our auctioneers reported challenges with obtaining payment from buyers post-auction being a significant concern. Non-payment not only increases administrative burdens but also exposes purchasers to potential lawsuits.

“In the property auction sector, it is interesting to see that a significant minority of auctioneers are using the new conditional auction practices, with varying reservation periods and fees. 

“Our property auctioneers also highlighted the need for an awareness campaign to dispel misconceptions about sale by auction among the public, and strongly emphasized their duty of care to both vendors and purchasers.“