What sells at a commercial auction, and what it costs to buy there
At the Allsop commercial auction in May 2025 the average lot sold for around £593,000. That figure tells you most of what you need to know about the market auctions serve. Small lots, mixed covenants, fast exchange, and a legal position you accept as you find it.
Written by Edward Harrowsmith, Director, Investments. Last reviewed September 2026.
What around £593,000 buys
A lot at that level is usually a single building with one or a small number of tenants. On retail that tends to mean a shop with upper parts, on a secondary or tertiary pitch in a town centre, or a unit on a local parade. On industrial it means a single small unit or a pair. On office it is often a converted building or a suite in a provincial town.
The covenant you meet at that level is a local or regional trader, an owner-managed business, a franchisee, or a regional multiple. Occasionally there is a national covenant on a short unexpired term, which is usually the reason the lot is in the room. Unexpired terms are frequently short, and part of the pricing is the market's view of what happens at expiry.
What you do not reach at that level is an institutional covenant on a long unexpired term in a town where the pitch is genuinely prime. Those assets are traded off-market or through agents to buyers who can exchange unconditionally at a scale auctions rarely handle, and they price accordingly.
For context on scale, a syndicate of fifteen participants, each at the £50,000 minimum, assembles £750,000 of equity with no bank debt. The auction average lot sits inside that range, and purchase costs sit on top of the price.
The process, and where the risk moves
The catalogue comes out first and the legal pack follows, usually a limited period before the sale. That pack is where the title, the leases, the searches, the special conditions and any replies to enquiries live. Reviewing it properly means instructing solicitors and a surveyor on a lot you may not win, and paying for that work more than once across a season.
Bidding is conducted to a reserve. The guide price is an indication and not a valuation.
Contracts exchange on the fall of the hammer. From that moment the buyer is bound, the deposit is payable, and completion follows on the date the conditions set. There is no subject to survey, no subject to finance and no renegotiation. If a survey afterwards finds a failed roof, a structural defect or an asbestos issue, the buyer owns that problem. The same applies to anything in the legal pack that was not read, including special conditions that shift the seller's legal fees, search costs and the cost of a rent apportionment onto the buyer.
The costs on top of the price
The buyer pays a premium to the auctioneer on most commercial sales, charged on the hammer price.
Beyond that there are the buyer's own legal fees, survey and valuation fees where instructed, and the seller's costs where the special conditions pass them across. Stamp duty land tax and VAT arise on commercial purchases, and their treatment depends on the buyer's own circumstances and on whether the building has been opted to tax. Take that up with your own adviser and, where a pension is involved, your pension provider.
The costs of losing also count. Abortive professional fees on lots you bid for and do not secure are real money, and they are spent with no asset at the end of it.
The even-handed view
Auctions are a legitimate route and sometimes the right one. They are fast, they are transparent on price, they clear stock that has a story attached, and they produce a certain sale date which is valuable to both sides. Receivers, executors, banks and institutions use them precisely because the process is reliable. Buyers who know a town, have their professional team on standby, and have decided in advance what a lot is worth do well in that room.
The limitation is that the discipline has to be imposed before the sale. The buyer takes title risk, condition risk and covenant risk at a price fixed in a few seconds of bidding, without the period of exclusivity that an off-market purchase allows for survey, enquiries and renegotiation.
Our own preference has been to buy off-market and unconditional where we can, because it gives us time to complete due diligence before we are committed, and it keeps us out of a competitive bid. That is a preference and not a rule about which route is better.