Auction House UK sets guide prices when marketing the properties, while reserves can be set at the last minute.
The auction house will have to make the meaning of their guide price clearer, with wording such as ‘the seller's minimum price expectation or ‘the currently anticipated sale price at auction’.
The Advertising Standards Agency said: “We considered that, without further explanation accompanying the prices, consumers would understand a ‘guide price’ to be a reasonable estimation of the price they could expect to pay for the property at the auction itself, and would not be aware that a reserve price could yet be set that might affect the minimum sale price.
“We considered that, in order to ensure that consumers were not misled as to the significance of the guide prices, such claims should be accompanied by clear and prominent information explaining the basis upon which the guide price was offered, including its distinction from a reserve price that could affect the minimum sale price during the auction, and the fact that it may be subject to change at a later date.”
The auction house can qualify its guide prices by using an asterisk with a link to explanative text, as according to ASA buyers should be aware that the property may not be purchasable at the lowest figures indicated.
When defending itself, the auction house linked YouTube videos produced by the National Association of Valuers and Auctioneers.
In the videos the guide price was referred as an indication of the final sale price from auctioneers, while it was stated that the reserve should generally not be more than 5-10% higher than the guide.
