Like the old Stetson-wearing poker professionals from a bygone era who forlornly look around casino rooms to see 20-year-old frat boys taking huge pots, the demographics of our auction rooms have changed forever.
As the decades have gone by, so the face of the auction market has changed. In the 1970s and 1980s (before my time), auction rooms were filled with seasoned professionals who all knew each other. Luckily, this is no longer the case.
Those halcyon days of “lock out” deals being done in the corridors of auction venues are now consigned to the memories of the professional dealers of a certain age who were party to such events.
A combination of the media explaining and detailing how this once secretive industry works (Homes under the Hammer is now in its 12th year and claims to pull in 2m viewers), along with internet sites such as eBay, means the benefits of the auction model are now free for all to see and understand.
And so, in the residential market in particular, we have seen not just an influx of amateur/part-time investors (although it will be interesting to see how this group deals with the new stamp duty hikes targeted specifically at them), but most notably more and more owner-occupiers attending our auction rooms over the past decade, especially since 2011.
Perhaps we are particularly friendly to the end-user market at Auction House London, with most of our sales staff having come from an estate agency background, but I am sure that this change is happening in auction rooms right across the UK. And so it should.
Most of us advertise our properties on Rightmove/Zoopla etc alongside all of the estate agents. So when a buyer searches for that two-bedroom flat in NW2 they see our lots alongside all the others, and we therefore get the enquiry.
It is at this point that the education starts. Once the inevitable and irritating question of “why is this being auctioned, what’s wrong with it?” line of questioning has been put to rest, then comes the job of helping the first-time auction user to feel at ease with the auction process and give them the confidence to attend the auction and bid.
There is nothing better for vendors (and, conversely, nothing worse for investors) than to see a room full of end-users, eagle eyed and excited to bid at their first property auction. Of the three groups of buyers – end-users, amateur investors and full-time property professionals – end-users pay the most.
They are not bothered about factoring in profit margins and, while they would obviously like to buy at a discounted price, it is not so important to them as it is to an investor/dealer. This in turn means that auctioneers can now start to look at stock that a few years ago would have been batted away without even a cursory desktop valuation – the fully modernised property, the “end-user stock”.
Of course, we all would love our catalogues to be loaded with glamour stock/auction porn: the unmodernised probate house in a sensational location that hasn’t been touched in 50 years complete with a vendor who “just wants it sold”. And the hunger to take on this type of stock will never wane.
But now when you open a residential catalogue, it should not come as a shock to see some stock that will appeal specifically to owner-occupiers. I expect this trend to grow and grow.
So those of us auctioneers who feel frustrated that auction sales currently make up just 1.75% of all property sales in the UK need to understand that in order to take our much larger rightful share we need to reach out to the end-user market more and not dismiss private treaty stock as unfit for auction.
We must welcome these sellers, but also explain and educate them as to why our pricing strategy will work for them. Likewise, we need to make our rooms as inviting to the first-time buyer and family looking to upsize/downsize their home as they are for seasoned investors.
Once our auction rooms start to become a viable and commonly accepted place for these types of buyers and sellers to do business as well as everyone else, only then will we achieve our goal of taking a much larger slice of the overall cake.
Andrew Binstock is director and auctioneer at Auction House London
