Some 2015 success rates have been spectacular. Revenues are up, but volumes are down. And auctioneers, with their unique forum and sound leadership, are well placed for 2016.
Auctioneers stand ready to take advantage of wider economic factors, including the scope for pensioners to take some of their retirement benefits in a lump sum; the growing availability of finance (at very low interest rates); government plans for yet more disposals of public sector assets; the banks’ planned shedding of significant parts of their branch networks; and the recent creation of more enterprise zones.
Judging by conversations with senior industry figures, the planned hike in stamp duty for additional homes, and other tax changes for buy-to-let operators, are not universally seen as a threat. At a recent working lunch with some of the sector’s most recognisable faces, Acuitus chairman Richard Auterac said the changes would lead to a more professional buy-to-let sector. And, taking a wider view, the UK property market is seen by overseas investors as a safe haven not directly affected by anxieties felt by eurozone countries.
While auctioneers are well-established players in the property market, they know that this does not mean that they can look forward to an era of picking money off trees.
Firstly, they understand the need to demonstrate that they operate professionally in a fair and well-regulated industry. Andrew Binstock of Auction House London is encouraged by the level playing field offered by auctions where there is no-one with “preferred bidder” status and the only discrimination concerns the level of bids.
Allsop’s Gary Murphy, though, worries that the RICS’ line on guide prices is not universally adhered to. And Strettons’ Philip Waterfield is anxious about the efficacy of money laundering checks when forged passports are readily available and title to property is no longer proved with deeds but with online entries on the register. He points out the special position of auctioneers, who, unlike private treaty agents, have to stand up and warrant publicly that they have the power to bind the owner to a sale. Waterfield also recognises that this position is unlikely to change any time soon and that the key step is to take customer due diligence seriously and, wherever possible, personally.
Secondly, auctioneers need to keep demonstrating that, while they are ideal agents for lenders whose borrowers are in trouble and for public sector organisations anxious not to be accused of doing down taxpayers, they operate across wide swathes of the property market. Murphy points out that many mainstream residential lenders now operate a policy of forbearance with homes, which delays sales but recognises the need for sensitivity.
Auctioneers feel let down by some sellers’ solicitors. Two key things for sellers’ solicitors to remember: be proactive and do as you would be done by. Once instructed, get cracking – obtain search results, assemble replies to standard enquiries, copy deeds, leases and tenancy documents. And get those documents scanned and over to the auctioneer quickly. Binstock contends that a well-prepared legal pack leads to more bidders and a higher sale price. He urges sellers’ solicitors to ask themselves this simple question: “If I were bidding for this lot, what would I need to know before I go to the auction room?”
Auctioneers have, for many years, made considerable use of the internet. Interested parties can view the catalogue online and, commonly, bid online. But some auctioneers feel that conducting entire sales online is a tactic that works only with some lots and some bidders. Murphy held an online sale of flats in the course of construction at West Drayton, near Heathrow. He says that the flats were ideal for overseas investors – and that all were sold.
My pleasant and stimulating lunch conversation ended with a Christmas wish list: Auterac desired the prompt publication of the fourth edition of the Common Auction Conditions; Binstock coveted “lots of sexy stock” for his February 2016 sale; David Sandeman of Essential Information Group hoped for world peace; Murphy, after what must have been a truly exacting year, felt that a train set and an Action Man would be ideal; Waterfield, whose firm is celebrating 85 years in business, looked forward to leading it for the next 85 years.
As for me, I hope to continue working with auctioneers as they take an ancient means of sale and make it ever more effective.
Nicholas Redman is senior professional support lawyer, DLA Piper
