As COVID-19 restrictions have limited in-person property auctions in the past year, online auctions have surged in demand. What is expected in the sector moving forward?
Auctions, and particularly online auctions, have become an increasingly popular way of buying and selling, especially in the past year. This offers many advantages to both sellers and buyers. And the sector will likely see further growth in the coming months and years.
Strong demand for buying property at auction
Auctioneer iamsold has reported a record-breaking number of bids so far this year. This shows there is a growing appetite for auction properties from buyers. Between January and the end of May, more than 22,000 bids were placed with iamsold. This is a 205% increase on the same period in 2020 and an 146% rise for 2019.
With the current fast moving property market, auctions have become an appealing option for some buyers and investors. This way of buying often provides speedier sales as most transactions complete within 28 days.
Additionally, Google data shows that interest for property auctions on the search engine is up 50% from last year, according to research from TIC Finance. This suggests that buyers and investors are turning to auctions in larger numbers than at the height of the COVID-19 pandemic last year.
What’s behind this surge?
This rise in demand for buying properties at auctions is being boosted by consumer confidence and a desire for alternative buying solutions that provide better security, speed and results.
Some buyers have used auctions as an opportunity to beat the stamp duty holiday deadline. And with many properties at auctions going for less than £250,000, which is the nil-rate band for stamp duty between 1 July and 30 September, auctions will continue to see strong demand in the coming months.
Jamie Cooke, managing director of iamsold, comments: “We’re extremely encouraged by buyer interest in properties, and it indicates that there’s a voracity in the auction market that hasn’t yet been seen.
“The buoyancy of the housing market, and consumers generally being more au fait with digital-first solutions in their everyday lives, is likely to have had an influence on the upward trajectory we’re experiencing.”
The rise of online auctions
Online property auctions have been offered for a number of years now. However, due to COVID-19 restrictions, auctions haven’t been able to take place normally in-person for over a year. Because of this, some auction houses quickly switched to online-only offerings. These kinds of auctions provide a unique and modern way to buy and sell. And these have been particularly popular in the past year.
With restrictions easing, there will likely be a transition back to in-person auctions. However, after the success of online auctions, many auction houses are expecting to develop a hybrid structure moving forward, allowing buyers to make bids in-person and online.
Where are the top property auction hotspots?
TIC Finance researched the search habits of buyers across the UK to find where the top hotspots are for property auctions. Overall, the West Midlands was home to the most interest from buyers. More than 69,000, or an estimated 241 in every 10,000 people were searching for the term ‘house auction’ each month.
On a city level, four locations in the north-west of England made up the top four auction hotspots. Chester led the way with an estimated 220 people in every 10,000 were searching for the term ‘house auction’ each month. Manchester followed with 192 and then Preston and Liverpool with 186 and 141 respectively.
Even after the stamp duty holiday deadline, auctions will likely remain a popular way to buy and sell. These areas in particular may continue to see strong demand for this kind of property purchase. As a whole, the property industry is embracing advances in technology. And online auctions may continue soaring in popularity, especially in areas seeing strong buying demand.