This week’s exclusive interview looks at a new perspective in the sale of new homes as Simon Capp at Allsop tells us about the company's online auctions of new build property.
Hi Simon, please tell us a little about yourself and Allsop.
I joined Allsop in 2016 to work alongside Gary Murphy, head of residential auctions, to develop this innovative sales method for new build property. I previously worked for Knight Frank and central London developer, Native Land. My recent career has specialised in tailoring global sales campaigns for many of the UK’s leading developers and housebuilders.
Best known as the UK’s largest auction house, Allsop is an independent property consultancy with over 100 years’ experience in commercial and residential property consultancy and sales. Allsop sells over £1bn of real estate at auction every year.
What inspired this online auction concept?
Allsop was the first firm to introduce online bidding to traditional property auctions back in 1999. Most auctions are now multi-channel, with people bidding in the room, by proxy, over the phone and online.
Allsop realised an online auction method could enable developers and housebuilders to market property in a highly efficient, fair and transparent manner. Our process enables all potential buyers, irrespective of their location, access to buy. The integration of auction law into process enables quick, secure sales for all parties involved, plus it empowers buyers by giving them direct access to product. Our format is designed for new to market, off-plan residential schemes.
Who are the auctions open to?
New Homes Online Auction is accessible to all buyers and our easy to use format is attractive to all types of purchaser; owner-occupiers and investors. We invite buyers to register with us to ensure they are kept up to date of forthcoming opportunities. We market one development at a time and aim to provide a mix of different product types and location.
What do potential buyers have to do to prepare for and use this system?
The first stage is to register for updates. Allsop promotes each development with a four- to six-week marketing period to give prospective buyers plenty of time to learn about the project, we provide clear marketing collateral enabling buyers to educate themselves about a scheme.
Buyers who plan to bid on the advertised auction day complete a short process; providing ID and proof of address. A bidder security sum (like a reservation deposit), typically around £2,000, is paid by credit card. This is automatically refundable if a buyer is not successful.
As the process is online, buyers are able to bid from home, at work, wherever they are based.
How does the website process bids - is it just like an online version of a traditional auction?
Buyers have full control over their bidding. Upon reaching reserve price, the highest bid wins – it’s that simple. Buyers can enter a set maximum bid or directly input their bids incrementally. All functions of our online auction room are designed to be easy to understand.
Like traditional auction, fall of the hammer (virtual hammer in this instance) is legally binding. It’s an extremely efficient and transparent sales method.
What are financial aspects that buyers have to work for on, for example, a unit that might cost £200,000?
Allsop charges buyers no fees to use the New Homes Online Auction service.
Payment terms differ slightly from project to project. These terms are explained at the outset so buyers are fully aware of the obligations if they decide to bid. Following the ‘bidder security’ sum, buyers will be required to pay an exchange deposit, usually 10% of the sales price, typically within 14 days, transferred through their solicitor. Like all off-plan sales, the major sum is payable on completion.
Can purchasers rely on the same consumer rights as buying the traditional way through an estate agent or developer?
Buyers of property through online auctions can rely on the same consumer rights of those buying in the traditional way. Our new process is simple to use and provides guidance at each point.
You conducted the first new homes auction last year - what did it show in terms of buyer interest?
Our first New Homes Online Auction consisted of 36 off-plan apartments in West Drayton, London. In the marketing period before the virtual sale, the auction and project website received over 28,000 hits. The auction secured a 100% success rate with a mix of buyer types; owner-occupiers and investors. Buyer feedback was extremely positive and the developer was delighted.
We have since refined and evolved the process to ensure ultimate user-friendliness and buyer appeal.
Do you have any information about future developments, when the next auctions might be taking place and how buyers and developers can find out more?
Our next New Homes Online Auction is scheduled for later this spring, further details to appear on our website soon. For more information, buyers can register their interest at www.allsopnewhomes.com