LSH first moved into online auctions in 2016. The online model ran concurrently with ballroom auctions. However, fast-forward to 2018 and LSH was in the process of designing a new online auction product called 574.
574 is an online property trading platform offering a secure and simple way to transact property. It enables auctioneers to track all elements of a sale, including the page views per lot.
One of the most compelling findings we’ve noted since than is how page views have soared since 574 was launched. Last year alone, they climbed 247%. Our statistics show that in 2016, each lot was being viewed between 100 and 150 times. Then in 2017, page views grew to just under 200 per lot. By 2018, page views rose to more than 400 per lot.
In 2019, the site documented an average of 1,250 page views per lot. In essence, the upwards tick over the past four years is a result of moving towards this more flexible model of having auctions totally online.
There has been a huge rise in engagement with each lot and that is seen across legal downloads and interested parties – in every metric we measure, there has been an uptick in the scale across the board.
Having online auctions allows investors and bidders to be on equal terms because of equal access. It’s not an intimidating process for potential investors.
There is evidence to show that this method of auctioneering is being picked up by the market on a wider level and we expect that to continue.
As with all innovation, the first movements are always on a small scale. But we are starting to see an increase in bidder activity, driven by the quality of investments we are offering. Frankly, no one would be looking at our lots if they were not the sort of property that was demanded by the market.
Now, we have developed a strong reputation among bidders for offering high-quality, varied lots across the country.
Bidders appreciate the honesty of an auction, whether it is online or in the ballroom, but there is a certain ease to buying online and to completely interacting and bidding with that lot within a single, online portal.
Strong local interest
From Dunfermline to Truro, we offer lots on a truly national scale. In every instance, there has been strong local interest, which is one of the fundamental benefits of having online auctions.
Getting interest from local investors who really know their market is key. They are the individuals who can see an opportunity where a national investor may not. Meanwhile, national investors are also beginning to gravitate towards online auctions so the competition between local and national investors drives competitive bidding.
Having auctions online allows investors and bidders to be on equal terms because of equal access. It’s not an intimidating process for investors; for a first-time buyer who is inexperienced in the process, it is comforting to be able to take part in the auction from a place that is convenient and comfortable for them. All the information is at hand with the benefit of being able to bid via that same source. This goes hand in hand with the idea that property investment has opened up as an investment avenue for a wider pool than it once was.
Online auctions will play an important role in the coming year. The limitations of the ballroom model include the finite amount of people that can fit in a room. This forms the bidder base for the entire day, which then diminishes as lots sell and punters leave. Online auctions have unlimited capacity.
For the local authority seller, unintentional delays are part and parcel of preparing a lot for sale – they do happen. The flexibility we offer allows these clients to react to that; if there is a delay with the auction pack, we can extend the marketing process and give bidders the appropriate time to view lots.
For example, if we had 60 lots on offer but there was a lack of interest from potential buyers at that particular time, by having an online sale we can then extend the auction, tweak the guide price and come back to the auction at a later date.
Security is another advantage to online-only auctions. There is going to be much more focus on money laundering in this area of the industry. The need for pre-registration is now becoming apparent in the market. Our service has included pre-registration for more than two years, giving added security. Some auctioneers are only just recently waking up to the need to be more compliant with the regulation of anti-money laundering checks.
Local authority buildings
The public sector has shown its support for online auctions by selling lots through us. There is a big market for publicly owned buildings including the likes of doctors’ surgeries, former libraries and some types of legacy buildings. Many of these types of properties are owned by local authorities, which is certainly part of the reason for the increase in 574’s buyer base.
Going exclusively online means we can guarantee our clients have certainty. The service provides transparency and the unconditional exchange of contracts. It is about creating the best value, driving competition and giving any potential bidder the opportunity to take part.
The limitations of auctions in general are that there are only so many that can take place in a year – typically five ballroom auctions. Online auctions are more flexible, while having the same outcome. They strip down the barriers to entry and offer more opportunities for more people to buy and sell. As 574 is based purely online, it offers such flexibility and increased reach to more potential investors.
Moving auctions online cannot be done half-heartedly, or alongside the ballroom model; it must be separated. Otherwise, there is no utilisation of the benefits of being online or gaining the flexibility.
The property industry has always been reticent to change but only making a bold step towards the new will work. The 574 platform signifies a bold step out of the norm. To get the engagement from the buyer base that we have seen over the past 12 months is a result of taking a dramatic step, not a small one.
574 is fundamentally different to the other auction platforms and services out there and we are making the most out of what we are doing.
- 247% – increase in page views per lot since 2018
- 2,152 – new subscribers to the 574 platform in the past 12 months
- 100% – success rate for public sector clients via 574
- 22 – flexible auction dates in 2019
- 615 miles – the geographical spread of our 2019 lots
Time for property to listen and learn
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LSH’s shift to online is a bold step out of the norm