Auction Sector Speaks Out After Rise in Property Ombudsman Complaints
The UK property auction sector has found itself under the spotlight following a wave of complaints directed to the Property Ombudsman. In response, Propertymark — the leading professional body for property agents in the UK — has issued a formal statement defending the sector and calling for a clearer understanding of how property auctions operate. The development has reignited debate about transparency, consumer protection, and the regulatory framework governing property auctions across England and Wales.
What Has Prompted the Response from Propertymark?
Complaints to the Property Ombudsman relating to the auction sector have raised concerns among industry stakeholders about whether buyers and sellers fully understand the auction process before committing to it. The Property Ombudsman serves as an independent redress scheme that handles unresolved disputes between consumers and property professionals. When complaint volumes rise in any particular area, it can signal either a problem with service standards or a gap in consumer understanding — and in the case of property auctions, both factors appear to be at play.
Propertymark's statement emphasised that many of the complaints received may stem from a fundamental misunderstanding of how legally binding auction transactions work. Unlike a standard private treaty sale, a successful bid at a property auction creates a legally binding contract immediately. This critical distinction is not always clearly communicated to first-time auction buyers, leading to disputes when purchasers attempt to withdraw or renegotiate after the hammer falls.
How Property Auctions Work: A Brief Overview
Understanding the complaints landscape requires a solid grasp of how the auction process differs from traditional property sales. Whether conducted in a room or via an online platform, property auctions in the UK operate under a strict legal framework:
- Unconditional auctions require the winning bidder to exchange contracts immediately on the day of the auction, with completion typically within 28 days. A non-refundable deposit — usually 10% of the purchase price — is paid on the spot.
- Conditional auctions (also known as the modern method of auction) allow a reservation period of around 56 days, giving buyers more time to arrange finance and surveys. However, a non-refundable reservation fee is still charged upfront.
It is the conditional or modern method of auction that has attracted the most scrutiny in recent years. Critics argue that buyers do not always realise the reservation fee is non-refundable, or that they are still responsible for legal and survey costs even if the sale ultimately falls through for reasons outside their control.
The Role of the Property Ombudsman in Auction Disputes
The Property Ombudsman (TPO) is a government-approved redress scheme to which all estate agents operating in the UK must belong. When a consumer raises a complaint that cannot be resolved directly with the agent or auctioneer, they can escalate it to the TPO for an independent review. The Ombudsman can award compensation to consumers where agents are found to have fallen short of the required standards.
An increase in auction-related complaints suggests that some agents and auctioneers may not be meeting their obligations under the TPO Codes of Practice. These codes require agents to provide clear, accurate, and timely information to all parties in a transaction — including full disclosure of all fees, charges, and the binding nature of the auction process.
What Propertymark Is Calling For
In its statement, Propertymark has defended the fundamentals of the auction model while acknowledging that improvements in consumer communication are needed across the board. The organisation has called for greater consistency in how auction houses and estate agents explain the process to prospective buyers, particularly those who are new to property auctions.
Propertymark has also highlighted the importance of agents adhering to existing legislation, including the Consumer Protection from Unfair Trading Regulations and the Business Protection from Misleading Marketing Regulations. These rules require that all material information — including reservation fees, exchange deadlines, and the non-refundable nature of deposits — be made clear before a buyer commits to any part of the process.
The body has further stressed the value of professional qualifications and ongoing training for those working in the auction space. Propertymark-qualified agents are bound by a code of conduct that prioritises transparency and fair dealing, and the organisation has encouraged consumers to seek out agents with recognised professional credentials when considering an auction purchase or sale.
What This Means for Buyers and Sellers
For anyone considering buying or selling through a property auction, this episode serves as an important reminder to do thorough due diligence before proceeding. Sellers should ensure they fully understand the fees involved and the timeline to completion. Buyers, meanwhile, should never bid at auction without having arranged finances in advance, reviewed the legal pack, and obtained independent legal advice.
Key steps every prospective auction buyer should take include:
- Reading the legal pack in full before bidding, ideally with the guidance of a conveyancer
- Understanding whether the auction is unconditional or conditional, and what the financial obligations are under each
- Clarifying all fees — including buyer's premiums and reservation charges — before attending or registering for the auction
- Arranging a survey on the property prior to bidding where possible
- Confirming that mortgage offers or bridging finance are in place before the auction date
The Bigger Picture: Regulation and Reform
The rise in complaints is part of a broader conversation about the regulation of the property industry in the UK. The Regulation of Property Agents (RoPA) working group previously recommended a mandatory licensing regime for all property agents, including auctioneers. While full implementation of these recommendations is still pending, pressure is mounting on the government to act — and episodes like this one are likely to accelerate that debate.
Consumer groups have long argued that the property market remains one of the least regulated major consumer sectors in the UK. In contrast, the financial services industry, for example, is subject to strict Financial Conduct Authority oversight. Bringing property agents and auctioneers under a similarly robust framework could help reduce complaints, improve standards, and rebuild consumer trust.
Conclusion: Transparency Is Key
The auction sector's response to the rise in Ombudsman complaints is a welcome acknowledgement that more needs to be done to protect consumers and uphold professional standards. Propertymark's intervention demonstrates the industry's willingness to engage with criticism constructively, but words must now be followed by meaningful action. As the property auction market continues to grow in popularity — particularly through online platforms — ensuring that buyers and sellers are fully informed at every stage of the process is not just good practice. It is a professional and legal obligation that the entire sector must take seriously.