Keeping up with the changing world of property auctions

The world of property auctions has changed dramatically from its traditional in-room roots. Especially since the pandemic, its popularity has grown significantly with both buyers and sellers in the residential and commercial property spaces thanks to the speed, certainty and transparency that it offers.

How have auctions evolved?

The supercharging of digital auctions has seen a growth in popularity as people see beyond the method being only for difficult to sell, unusual or dilapidated stock.

According to our analysis of Essential Information Group data, the number of total auction sales in 2024 was 90% higher than in 2020. In addition, the number of sales in 2024 through live stream auctions grew by 174% compared to 2020, while online sales grew 99% and in room sales declined by 27% in the same period. The data also shows that while in 2019 in-room auctions accounted for 96% of the total sales, by 2024 the proportion was only 9%.

Online property auctions, which present lots for buyers to bid on through a digital platform, have grown in popularity as they are easy to access anywhere, and provide a quick to set up route for real estate businesses to provide an auctions service on a regular basis. Like a traditional auction, the sale is complete when the countdown ends, providing the security and speed of sale that is desired.

A balance between the in-room and digital worlds, livestream auctions have proven to be popular as well. Largely driven by necessity in the pandemic, this variation combines a live feed of the auctioneer on the rostrum with the ability to bid online, giving buyers the access to the auctioneers knowledge of the lots and creating an atmosphere of competition akin to the in-person experience.

By leveraging digital channels to offer a remote option, more flexibility has been afforded to buyers to access auctions without needing to travel or take time away from other commitments. Catalogues now have a varied array of residential and commercial property across the UK and can provide bidders, from first time buyers to experienced commercial developers, with the potential to find a potential opportunity where they may not have considered looking.

For sellers this means there is a more varied pool of buyers who are committed to purchasing, which in turn delivers more certainty of sale. The element of competition it brings can also in turn result in higher values achieved, an extra bonus for sellers.

Balancing human connection with tech advancements

Beyond the advent of live streamed auctions, a number of other tools are helping to enhance auctions. Companies such as Docuwise for instance use AI for legal pack summarisation, which condense complex documents into clear buyer-friendly insights, give more confidence to prospective buyers, particularly ones who are newer to auctions.

Targeted marketing and segmentation tools that use AI can also help to match specific properties to the right buyers, giving more security of sale and confidence to buyers.

Predictive analytics powered by AI also deliver valuations support and sales price forecasts based on historic data. This not only helps to better plan and predict the direction of a property market, but to standardise and level the playing field with valuation delivering further confidence for buyers and sellers.

AI is also playing a key role in anti-money laundering and fraud detection. By flagging anomalies in ID checks or legal documents, AI is enhancing the ability of property professionals to identify illegal activity at the outset, further improving confidence and trust in the auction process.

We have to remember that while they may enhance auctions, implementing new digital and AI tools cannot completely replace the expert role that agents and auctioneers have with their buyers and sellers. The human connection and expertise that estate agents and auctioneers provide as they advise sellers and buyers on the best route for their property will deliver the best outcome for all parties.

Focus on transparency for buyers, particularly consumers who are new to the world, is key for keeping confidence in auctions high as popularity grows. This means clearly communicating fees in legal packs, ensuring clients understand the process and its obligations, and strategically implementing digital and AI tools to benefit buyers and sellers alongside the human-centric expertise and communication that cannot be replaced.

How does this benefit the market?

The evolution of property auctions now means that more people than ever can benefit from the speed, transparency and security of sale than ever before. While delays in the private treaty market have proven costly and caused a drop in confidence, the auction route has prevailed by focusing on providing information upfront and producing committed buyers and sellers.

It isn’t just a popular route for residential property. Businesses have long used auctions as a means of quickly unlocking value from property. However, we are seeing more and more that auctions can be a strategic tool to both rationalise property within an organisation’s portfolio that could be put to better use by another owner, or as a source of opportunities to develop new sites as a buyer. Working in collaboration with other services within BTG, auctions are being deployed as a strategic tool for the businesses we work with to provide means for investment, evolution, recovery or sustainable growth.

As auctions develop further, auctioneers and real estate agents will continue to prioritise transparency and providing expertise to ensure property owners, developers, homebuyers and businesses can leverage this strategic tool to unlock value quickly.

If you would like to find out more about how auctions could be an option for you, visit: www.btgeddisonspropertyauctions.com