Franchise business Auction House plans to extend its network to cover all areas of the UK within the next few years.
The auctioneer, which has just marked its 10th anniversary, has 40 auction rooms run by 31 franchisees, but believes the ballroom number could hit 50.
Areas of expansion earmarked by Auction House include Kent, Worcestershire, Oxfordshire and mid-Wales.
Managing director Roger Lake said: “These are the main areas where we would like to strengthen. There is capacity for more franchisees and growth, but I doubt that we will go past 50 [auction rooms],” he told EG, with “a potential maximum of 50 auction rooms to service all parts of England, Scotland and Wales.” However, he would not specify a timetable for the expansion.
Lake stressed the importance of offering local auction rooms. “If you live in Norwich, you will use a Norwich-based estate agency, and some will go for auction. Regional auction rooms will continue to out-perform London ones.
“Auctions have become a mainstream alternative on the back of our activity, and there is now a wide understanding that local properties sell at higher prices to local buyers through nearby auction rooms – a theme we are committed to developing throughout the next decade.
“We can’t just rely on the continuing flow of corporate stock. We are selling more and more stock for owner occupiers and the auction room is no longer a ‘no no’ for private buyers. We can sort out mortgage finance quickly,” he said.
If taken together, the Auction House franchisees would claim top spot in the residential ballroom league table for 2016 on the basis of lots sold rather than amount raised, second behind Allsop for commercial sales.
The residential lots sold figure topped 3,330 last year, and the franchise handled 14.2% of the overall residential and commercial lots sold.
“In the last 10 years we have grown from having just a single sales room in Norwich to running 40 auction rooms across the UK, and a collective annual turnover in the region of £10m.”
The London franchise, Auction House London, sells the largest amount by value of the franchisees with around £450m in 2016, but five other members of the stable sold more than £250m last year.
Each franchisee buys a five-year licence with Auction House, with the newest being Auction House Cheshire, run by estate agent Wright Marshall.
Auction House also offers lots online using the Essential Information Group platform.
“More and more people are buying that way,” Lake said. “But it will take a little while for people to be confident to bid online rather than in the auction room. We are king of the ballroom auction approach.”
Auction House story
Auction House has sold more than 20,000 lots since its inception on 1 July 2007, when it had a single sales room in Norwich.
It now has 31 franchisees running 40 auction rooms across the UK, and a collective annual turnover in the region of £10m.
Its franchisees have held 1,415 auctions across the country over the past decade, with a success rate of 78%, raising a total of more than £2.3bn.
During that time, the average selling price at Auction House has risen from £80,000 to £130,000.
