SALES BY AUCTIONS A practical guide to auctions for local authorities

Ben Hodge

Ben is a chartered commercial investment surveyor with an emphasis on sales by auction. Ben joined Savills as a Director in July 2024 to focus on the commercial offering within the market and leading a mixed use auction team. Ben has advised central government and local authorities, providing strategic advice across the country, helping clients to achieve their goals in a manner that suits them.

In this punchy article, Ben extols the virtues of selling surplus property by auction. “By aligning council priorities with auction values, councils can maximise the return on their assets, ensure compliance, and provide a clear and justifiable sales process.” 

Aligning council priorities with auction values 

Local authorities often find themselves in possession of legacy properties that require significant capital expenditure. These properties, while potentially valuable, can become financial burdens if not managed effectively. To address this, councils may turn to auctions as a strategic method to raise capital, fund new ventures, or cover existing costs. 

Transparency and compliance in auctions 

One of the key advantages of auctions is their inherent transparency. With ‘Know Your Customer’ compliance at the forefront, auctions ensure that all transactions are conducted openly and fairly. This transparency is crucial for public sector bodies, which have a duty to demonstrate best value for taxpayers. By using auctions, councils can provide a clear and justifiable sales process, making it easier to defend decisions if challenged. 

Achieving market value 

Auctions are designed to achieve market value by bringing together willing buyers and sellers who agree on a price without compulsion. This competitive environment ensures that properties are sold at their true market value, reflecting current demand and supply dynamics. For councils, this means they can maximise the return on their assets, providing much-needed funds for other projects or liabilities. 

Definitive timescales and liquid sales process 

Another significant benefit of auctions is the definitive timescales they offer. Typically, the period between exchange and completion is around 20 working days. This allows councils to have the completion monies in their accounts by the end of the month, providing a liquid and efficient sales process. This quick turnaround is particularly beneficial for councils needing to raise capital swiftly. 

Cost-effective disposal method 

Traditionally, auctions have been seen as a relatively expensive route to market. However, as buyers have become more accustomed to absorbing costs, public sector bodies can now charge disposal costs back to the buyer. This shift has made auctions a cost-neutral method of disposal for councils, further enhancing their appeal as a strategic sales option. 

Savills’ expertise in auctions 

At Savills, we have extensive experience in leveraging our expertise in auctions for the benefit of local authorities. In the past year alone, we sold in excess of £810m-worth of properties at auction. Our global brand and extensive reach, combined with a strong local presence through our network of over 60 offices across the UK, ensures that we can effectively market and sell properties for councils. 

Track record 

As a team, Savills has regularly acted for local authorities across London and country-wide locations, in addition to other public bodies with similar requirements. Our deals range greatly, from Grade II listed sports facilities, to a vacant former bank in East Dulwich with redevelopment potential. In both examples, the publicly owned client demonstrated market value through the transparent auction sales method, realising the proceeds of the sale within four weeks of exchange. 

Conclusion 

For local authorities looking to manage their property portfolios effectively, auctions offer a transparent, efficient, and cost-effective solution. By aligning council priorities with auction values, councils can maximise the return on their assets, ensure compliance, and provide a clear and justifiable sales process. If you are a local authority interested in discussing your property needs, whether residential, commercial, or otherwise, please get in touch with us at Savills. Our expertise and extensive network are at your service to help you achieve the best outcomes for your as