SDL Auctions

A Message from Lord Pickles and Lord Blunkett, followed by SDL Auctions's best practice article

The ability to listen and learn from one another has always been vital in parliament, in business and in most aspects of daily life. But at this particular moment in time, as national and global events continue to reiterate, it is uncommonly crucial that we forge new channels of communication and reinforce existing ones. The following article from SDL Auctions is an attempt to do just that. We would welcome your thoughts on this or any other Parliamentary Review article.

Rt Hon The Lord David Blunkett

Rt Hon The Lord Eric Pickles

www.sdlauctions.co.uk

1SDL AUCTIONS |

BEST PRACTICE REPRESENTATIVE

Graham Penny, Consultant to

SDL Auctions

Competitive bidding in the

auction room

Graham Penny is the founder of Graham Penny Auctions,

now part of SDL Auctions, and a leading national

property auctioneer. Founded in 2006, Graham Penny

Auctions was purchased by SDL Group in 2016. Now acting as

a consultant to SDL Auctions, Graham reflects on how property

auctions can augment the current UK property market and

he explains that they should be considered as an alternative

approach by anyone looking to buy or sell a home.

Property auctions are a genuine alternative to private treaty sales and in some cases

can realise a better sale price. It’s an accurate barometer of the market at the point

of sale; if you offer a property for sale to an audience of competitive bidders, you

will secure the best price.

For those sellers who have been on the private treaty market for a while, vendors

who require a quick sale or maybe those who have a property in need of repair, an

auction is the perfect method of sale. With an unconditional auction sale, contracts

are exchanged on the fall of the hammer and completion takes place within 28

days. The speed, efficiency and decisiveness of this process has benefits for both

sellers and buyers in comparison to the uncertainty of lengthyprivate treaty sales,

and the lack of any redresswhen a sale falls through.

I built Graham Penny Auctions – now SDL Auctions – around offering buyers and

sellers a transparent, impartial and quick sales process. We have always offered

realistic advice both in terms of the likely sale price and whether an auction sale is

FACTS ABOUT

SDL AUCTIONS

»Consultant to SDL Auctions:

Graham Penny

»Founded in 2006

»Based in Chilwell, Nottingham

»No. of employees: 50–60

»Services: Property auctioneer

»www.sdlauctions.co.uk

SDL Auctions

THE PARLIAMENTARY REVIEW

Highlighting best practice

2| SDL AUCTIONS

the right method. This transparency

created solid and trusted foundations

for our business and helped us secure

the position of number one property

auctioneer in the Midlands every year

since 2006.

SDL Auctions

SDL Auctions is now the third

largest property auctioneer outside

of London and the most successful

in the Midlands, based on Essential

Information Group statistics from

the first half of 2018. We sell a wide

range of residential and commercial

properties on behalf of both private

individuals and corporate clients via 40

auction events at large sporting venues

across the UK. In 2017 we began

to offer properties for sale by online

auction every day of the year.

We are incredibly proud of the success

we have achieved over the past

decade with our traditional auction

event business and we are using that

experience and expertise to build what

we believe is an exceptional online

auctions product which really helps

set us – and our partner estate agents

– apart from the competition. We

blend together the competitive bidding

environment of an auction with the

benefits of a personal estate agency

sales experience, opening up the

market to a wider pool of buyers and

sellers, including owner-occupiers.

The auction landscape is

changing

Until a few years ago, auctioneers only

offered unconditional sales where

contracts are exchanged immediately

on the fall of the hammer and

completion took place 28 days later.

That meant auctions were exclusive

to those with ready-money to spend,

typically investors. If a four-bedroom

detached property isn’t mortgageable

then only a small pool of people are in

a position to purchase.

Today the auction market has opened

up to incorporate conditional sales,

which requires a reservation fee to be

paid and delays exchange of contracts,

allowing buyers to secure a mortgage

or suitable finance. We are one of

only a handful of auctioneers offering

both conditional and unconditional

sales via traditional auction events and

online auctions. We have embraced

this shift in the market and believe we

are leading the way in making auctions

more market-friendly for both vendors

and purchasers.

Homes under the

Hammer captures

the excitement of the

auction room

We blend

together the

competitive

bidding

environment

of an auction

with the

benefits of a

personal

estate agency

sales

experience

“

3SDL AUCTIONS |

BEST PRACTICE REPRESENTATIVE

To help facilitate our expansion into

online auctions we also launched a

division dedicated to partnering with

estate agents, allowing them to set up

their own auction department using

our online auction sales infrastructure.

Our agents now have an additional

sales product to offer and we have a

platform to offer all types of property

auction to the UK property market.

Developing industry

regulations

There are a handful of rulings that the

property auctions industry must adhere

to, including one which states that a

property cannot be sold without a legal

pack. I believe this ruling is positive

for the industry as it reinforces the

transparency of auction sales; however,

there is currently no minimum content

requirement for these packs, which I

feel should be introduced.

At the moment it is possible for a

suitable legal pack to only include

a contract. This is not enough and

should be expanded to include at

least Land Registry data along with a

property information form detailing

services and boundaries, such as the

type you would get in a private treaty

sale. Understanding the value of these

legal packs, we established a unique

“no sale, no fee” legal pack offer for

our online auctions, breaking down

another barrier to entry for auction

vendors.

In 2014, the ASA introduced guidelines

stating that a guide price must be

less than ten per cent above or below

the reserve price, meaning the guide

price really is a guide to purchasers.

When I conducted my first auction

there were no guide prices and this

introduction has definitely improved

the understanding and trust in our

industry. Auctioneers can no longer

price things low to generate interest

and mislead buyers into an overly

competitive bidding situation.

The future of property

auctions

In the past few years, we have seen

a few smaller auctioneers disappear,

acquired by the larger networks. We

will see more of this in the future

and it can only be a good thing for

the industry. Larger auctioneers have

the capacity for national marketing

of properties, and bigger catalogues

ensure bigger audiences in the auction

room and genuinely competitive

bidding to achieve the best price for

vendors. With over 250 property

auctioneers in the UK today, it’s highly

unlikely we’ll get to a situation where

any one business has a monopoly.

Undoubtedly,

Homes Under the

Hammer

has been a significant

contributor to improving the public’s

knowledge of auctions and has

enhanced the profile of the property

auctions industry. In other parts of

the world, selling property by auction

is the main method of sale, with its

speed, security and transparency of

sale. The same emphasis should be

given to property auctions in the UK.

Undoubtedly,

Homes under

the Hammer

has been a

significant

contributor to

improving the

public’s

knowledge of

auctions and

has enhanced

the profile of

the property

auctions

industry

“

Property auctions can

realise a better sale price

than private treaty

www.sdlauctions.co.uk

This article was sponsored by SDL Auctions. The Parliamentary Review is wholly funded by the representatives who write for it. The publication in which this article originally appeared contained the following foreword from The Rt Hon Theresa May MP.

The Rt Hon Theresa May MP's Foreword For The Parliamentary Review

By The Rt Hon Theresa May MP

This foreword from the then Prime Minister appeared in the 2018/19 Parliamentary Review.

British politics provides ample material for analysis in the pages of The Parliamentary Review. For Her Majesty’s Government, our task in the year ahead is clear: to achieve the best Brexit deal for Britain and to carry on our work to build a more prosperous and united country – one that truly works for everyone.

The right Brexit deal will not be sufficient on its own to secure a more prosperous future for Britain. We also need to ensure that our economy is ready for what tomorrow will bring. Our Modern Industrial Strategy is our plan to do that. It means Government stepping up to secure the foundations of our productivity: providing an education system that delivers the skills our economy needs, improving school standards and transforming technical education; delivering infrastructure for growth; ensuring people have the homes they need in the places they want to live. It is all about taking action for the long-term that will pay dividends in the future.

But it also goes beyond that. Government, the private sector and academia working together as strategic partners achieve far more than we could separately. That is why we have set an ambitious goal of lifting UK public and private research and development investment to 2.4 per cent of GDP by 2027. It is why we are developing four Grand Challenges, the big drivers of social and economic change in the world today: harnessing artificial intelligence and the data revolution; leading in changes to the future of mobility; meeting the challenges of our ageing society; and driving ahead the revolution in clean growth. By focusing our efforts on making the most of these areas of enormous potential, we can develop new exports, grow new industries and create more good jobs in every part of our country.

Years of hard work and sacrifice from the British people have got our deficit down by over three quarters. We are building on this success by taking a balanced approach to public spending. We are continuing to deal with our debts, so that our economy can remain strong and we can protect people’s jobs, and at the same time we are investing in vital public services, like our NHS. We have set out plans to increase NHS funding annually by an average by 3.4 percent in real terms: that is £394 million a week more. In return, the NHS will produce a ten-year plan, led by doctors and nurses, to eliminate waste and improve patient care.

I believe that Britain can look to the future with confidence. We are leaving the EU and setting a new course for prosperity as a global trading nation. We have a Modern Industrial Strategy that is strengthening the foundations of our economy and helping us to seize the opportunities of the future. We are investing in the public services we all rely on and helping them to grow and improve. Building on our country’s great strengths – our world-class universities and researchers, our excellent services sector, our cutting edge manufacturers, our vibrant creative industries, our dedicated public servants – we can look towards a new decade that is ripe with possibility. The government I lead is doing all it can to make that brighter future a reality for everyone in our country.

British politics provides ample material for analysis in the pages of The Parliamentary Review

The Rt Hon Theresa May MP
Prime Minister