Ahead of the stamp duty holiday deadline of 30 June, there has been a sharp rise in the number of buyers acquiring properties under the hammer in recent weeks, according to iamsold.
The company reports that 4,957 bids were placed last month, with buyers keen to benefit from the Modern Method of Auction’s (MMoA) fixed timescale.
Around 22,000 bids were placed though iamsold between January and the end of May, which is up by 205% compared with the same period last year and 146% up on the corresponding period in 2019.
Aside from an active market in the run-up to the stamp duty deadline, Jamie Cooke, managing director at iamsold, is hoping that the increases also indicates a growing appetite for auction properties and this method of sale.
The upward shift in competitive bidding is also driving up sales, with iamsold having sold 2,159 properties so far this year raising £345m in capital value for sellers.
Cooke said: “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 demand for homes isn’t slowing down, however, the number of properties available by private treaty is.
“Much like the rest of the market, our average sale price is increasing in line with this demand, however, we’re not expecting the slump that some are predicting once the stamp duty holiday comes to an end. Our data shows us that buyers are actively seeking alternatives that not only could offer them a good investment, but a digital-buying process that is similar to those that they are familiar with in their everyday lives.
“We’re in the middle of a perfect storm as we have a greater range and number of properties now available for auction, appealing to more buyers to meet the demand that is not being met by the wider housing market. The expectations of consumers align perfectly with the benefits that the Modern Method of Auction is able to offer – speed, security, transparency, and an accessible bidding process that drives results.
“It’s a great time for estate agents to consider adding auction to their portfolio of services as a way to win new instructions and provide their clients with much needed choice.”
Comments (11)
Because the offer of a free dinner when you are selling a house is too much for many people to resist, even if it ends up as a MacDonalds and their property is not really suitable for selling by MMA or traditional auction (another something which the agent should be pointing out to the seller under the revised TPOS Code). Many properties sold under MMA would be better sold under private treaty or proper (traditional) auction which is also online these days.
I Am Sold has a superb publicity machine of which Big Brother would be proud. It turns negatives into apparent positives. It has advertised in its flyers that both seller and buyer are bound by the reservation period and then conveniently ignores in its contracts that the seller is bound (all their contracts may not be identical and this may have changed recently). Under Contract Law that clause can make the contract unenforceable, but of course the buyer doesn’t know that. Current estimates indicate that around a third of people who would otherwise buy at auction are put off by the astronomical non-recoverable reservation fees and those that are not build in what is a material out of pocket sum into their bids. Also, the reservation fee is added to the purchase price for stamp duty purposes, another whammy for the buyer. Sellers are meant to be told that these fees would affect the amount they achieve on their sales and may affect whether or not the property sells under the revised TPOS Code of Conduct, but I’ve yet to find any seller who has been told this when they are seduced by a no-fee commission. Many solicitors argue that MMA is a form of tender wrapped up in window dressing rather than auction because it is “subject to” exchange a month later.
Obvious question which has no answer is, if its such a good way of selling a property and they are transparent with Sellers on the fees then why dont they just charge the fees to the sellers?
Considering it’s currently taking some solicitors SIX months to complete a sale, then auction is not only a great option for buyers, but also cash flow for agents.
Correct thats why Auction Helps, MMOA doesnt
This article made me laugh!!
Beat stamp duty by paying iamsold a fee for buying?????
Sorry this isn’t news it’s just PR for companies.
This article makes no sense. If a buyer is turning to auction to beat the stamp duty deadline then the Modern Method of auction doesn’t do that as it’s 56 days for completion
elibh 35 Total revenue last year was £24.1m off the back of 3,768 sales (6,413 instructions) Cost of sales were £13m which accords to half the fee* passed onto introducing agents you refer
*Elibh If its 5% and 2.5% not a 1% kickback I guess the agent will only be channelling the truly motivated seller down this route with those level of fees .However in their best practice guide they state
“Fees must always be confirmed with the VAT included. Fees charged as a percentage needs to be confirmed as an actual amount including the VAT. For instance, if the fee is 2.5% plus VAT, display it as 3.0% including VAT. For the bidder, remember to confirm the associated stamp duty implication”
Partner Agent gets 50% of the fee which is usually a min of 5% plus Vat (I have not looed at the accounts put 50% of £24.1m is close the Cost of sales you mention of £13m)
Fundamental question is if the MMOA is good and transparent as per https://www.iamsold.co.uk/document-download/98d0b19cdf644153b891b47eec93ad14 then why dont they just tell the sellers its a 5% plus vat fee if it sells?
I wonder why
Certainly turned in a decent profit of £2.7m in the latest accounts for a period impacted by COVID ,so a very well done to that
and have assembled a decent roster of estate agents .
Delaying completion from 1 to 2 months , granted is attractive for many as it gives an extra month to sort the completion monies out
but still many buyers who could possibly offer for a property more need to sell a house first taking out quite a chunk of demand
According to the latest accounts (Oct 2019 /2020) approximately 59% of the properties instructed were sold which means 41% didn’t by this method .
Although it is offered on a no sale no fee basis that is quite a lot of disappointed vendors .
Today you have currently 1,353 instructions which include those with the words Pre Auction marketing but bids already received on some of those
Appreciate all the action takes place at the business end of the races but less than 180 of those currently have bids despite “sharp rise in buyers”
Is iit expected that 59% success rate will improve this financial year ?
IAmSold partner agents are paid hush money to play along with this utter nonsense of Modern Method of auction. If they sell a property on open market they get 1%fee here they get 2.5% which is half iamsolds fee.
IAmSold go on about there “best practice guide” the partner agent are either not aware of it or don’t keep to it.
MMOA does no good for anyone
If anything brings prices done becuase of the enormous fees paid above purchase prices.
It’s only lasted this long as it’s unregulated.