Property Auctions UK

Welcome To Property Auctions UK

UK Property Auction Guide.

We’ll cover everything from finding local property auctions near you to what happens at a UK property auction, how to bid on auction properties and the legal aspects of buying a property sold at auction.

The most comprehensive property auction guide in the UK – compiled by experts with over 50 years experience in the UK property market.

Image showing a house for sale via property auction
Some houses sold at UK property auctions provide massive opportunities for renovation and resale, like this cottage near Aberdeen. Photo © Bill Harrison (cc-by-sa/2.0)

UK Property Auctions Explained

There are a number of common misconceptions about buying property for sale by auction. One is that the properties are problematic in some way, or they are mainly repossession properties by banks or finance companies. This is not always the case.

Sellers use property auctions for a huge variety of reasons. Some might be interested in a quick sale while other properties are sold on behalf of a trust or charity.

In such circumstances, a property auction is the most open and transparent selling process.

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Who Buys Property At Auction?

Photo of a house sold at a property auction in the UK
UK property auctions cover just about every kind of property you can think of, but lots such as rural properties tend to be very popular. Photo © Pauline E (cc-by-sa/2.0

People who attend UK property auctions come from all walks of life ranging from first-time buyers to property investors and developers. Many people buy or bid at UK property auctions for a specific reason, such as:

Having said that, buying auction properties is not for everyone. As buying a house will probably be your most costly financial transaction, you should think the matter through carefully before making the decision to buy any property at auction.

In order to be successful buying property for sale by auction, you need to be committed, organised and be prepared to work fast.

This requires you to make a major investment of both time and money, so let’s get started with the information you need to know.

Photo of a cottage sold at a UK property auction
Before you even think about bidding at a UK property auction, try attending a few local auction houses to get a feel for the process. Photo © Trevor Littlewood (cc-by-sa/2.0)

Recommended UK Online Property Auction Houses:

Introduction To UK Property Auctions

Undoubtedly, you need to weigh up the pros and cons before reaching a decision about whether buying a property at auction is the right choice for you. Let’s consider the advantages and disadvantages in some depth.

The Advantages of Property Auctions

One of the main advantages of buying in this way is that you might be able to grab an undervalued auction property at a bargain price.

Auctions have a good variety of property for sale

Another benefit of these property auctions is the sheer variety of properties available. Whether you are interested in residential, commercial property, industrial, agricultural land, wooded land for sale or mixed-use properties, you will be able to find what you are looking for.

Some of the houses sold at auction are ones which estate agents are reluctant to take on. They might be an unusual conversion or made of non-standard materials. If your dream home is something out of the ordinary, then a property auction is the right place for you.

Property sells quickly at auction

A further advantage of these auctions is the speed of the sale procedure. While the conventional method of buying property through an estate agent might take months, the time between the property auction and completion is usually 20-30 days.

Image showing an example of the types of houses sold at auction
You may be surprised with the kind of houses for sale by auction in the UK, like this beautiful home in Scotland.

Buying property at auction is safe and reliable

Buying a property at auction is the most reliable way to purchase property. As soon as the auctioneer’s hammer falls on your winning bid, the house legally belongs to you. You can therefore avoid the common pitfalls of buying a home through an estate agent such as being gazumped or the sale falling through because you are part of a chain.

You know what other people are bidding

As far as the bids are concerned, it is a level playing field with timing playing a key role. Unlike estate agents who ask for bids in sealed envelopes, the auction procedure is completely transparent. You can see what other potential buyers are bidding and make an on-the-spot decision about whether to bid higher or drop out.

Local Property Auctions::

Photo of a row of houses sold by UK property auction
Although you cannot be gazumped at a property auction, bidding on properties can be fast and competitive. Don’t overbid or get carried away, your offer is legally binding. Photo © Alan Murray-Rust (cc-by-sa/2.0

The Disadvantages of Property Auctions

The speed of completion of the sale of property for sale by auction also has its downside.

Have your property finance in place first

You have to work fast as you have less than a month to ensure that your property financing is in place. Although you avoid estate agent fees, the auction house charges around £200-£300 while a deposit of 10% of the sales price must be paid on the day of the auction.

You may not win the bidding on the property

Another drawback of buying a property at auction is that there is no guarantee that you will call the winning bid. If you are outbid, your investment in time and money such as visiting and inspecting properties and any money paid for property surveys will have been wasted.

This can be difficult for some property buyers especially when this financial commitment has been accompanied by an emotional attachment to the property as their future home.

There are inherent risks with buying auction properties

There are also risks to buying a property at an auction, such as the condition of the property. An auction house bargain might not turn out to be such a bargain if it costs you thousands of pounds to rectify the problem – whether that is repairing major structural problems or extending a short lease.

How to find property for sale by auction
Property auctions occur all over the UK. One of the best strategies is to contact a local auction house in your area of interest. Photo © Bernard Sharp (cc-by-sa/2.0)

How To Find Property Auctions

If you decide that buying a home through an auction is the right choice, you should begin by contacting as many UK auction houses as you can.

London property auction houses tend to have properties from all over the UK while smaller provincial houses tend to specialise in properties in their locality. Internet-based property auction houses also sell properties from all over the country.

As a personal safeguard, you should ensure that the UK auction house is NAVA Propertymark protected. Membership of this scheme includes Client Money Protection, Professional Indemnity Insurance and recourse to a redress scheme if you believe the auctioneers acted fraudulently.

Auction House Catalogues

When you contact the property auction houses in the UK, you should ask to subscribe to their mailing lists or newsletters and request catalogues for any future property auctions to get an idea of what is available. These catalogues are published about 3 weeks before the property auction and include:

  • photos of the property
  • a guide price (the auctioneer’s starting price)
  • information about the property
  • terms of purchase
  • information about how to arrange a viewing
  • a link to the legal pack (which has information about the title, any restrictions, etc.)
  • special conditions of sale such as ‘unless previously sold’. This means that the seller is prepared to accept offers before the auction

Top property auction tip: Be careful not to get carried away when bidding at UK property auctions. It is easy to do and difficult to back out of. Make sure you can afford to pay what you are bidding, including all the property auction fees.

House for sale by UK property auction
No matter how appealing the property for sale by auction may be, don’t get carried away. Stay within your budget at all costs. Photo © Michael Dibb (cc-by-sa/2.0)

Preparing to Buy Property At Auction

If you feel unsure about how to buy a house or land for sale at auction, an important part of your preparation should be to attend one in person. You are under no obligation to bid for anything, but this experience would show you what to expect when buying and give you an insight about how the property auction works.

You must also decide where you would like to buy property. Once you have chosen, you should put in the hours of research as you would for any property purchase. Visit the neighbourhoods and towns and tick off the things on your shortlist – whether this is easy access to a good school or proximity to sports facilities.

Research local house prices

As well as investigating the facilities in the area, you should also use your visit as an opportunity to research local house prices. Have a look to see how much previously sold properties have gone for. This will give you a yardstick to judge whether a property put up for auction is a good bargain or not.

Once you feel ready to take the plunge, you should start looking at the property auction catalogues in more depth. Concentrate on the neighbourhoods you have chosen but be flexible. You should also be patient. It might take some searching before you find a suitable property.

Once you have found what you are looking for, you should arrange to view the property. Try to visit properties at different times of the day as this will give you an idea of any problems which might not be apparent from one visit.

Picture of some houses for sale in England
Once you have th auction house catalogue, check out local house prices and compare the property you are interesting in bidding on. Photo © Malc McDonald (cc-by-sa/2.0)

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Carry Out A Survey of Auction Properties

Although there is no legal requirement to carry out a survey of the property beforehand, it is wise to do so for your own peace of mind. A survey can reveal any problems which might end up costing you money in the long run. It will pinpoint any major structural issues including:

Property surveys vary in their thoroughness which in turn will affect their price. They range from the cheapest, a property condition report (about £300) which goes into less detail to a full building survey (£500-£2,000) which is carried out by a RICS chartered surveyor.

Whatever you decide, remember that the cost of the survey comes out of your own pocket. If you are outbid in the auction, this money has been spent and cannot be recovered.

The type of survey you decide on will depend on the age and condition of the auction property you are interested in. In the case of listed buildings or badly maintained older buildings, a complete homebuyers building survey would probably be your best option.

Even if the property survey is negative, don’t be disappointed. Ask for more details about how serious the problems are. For example, are they urgent or can any repairs wait? Consult an expert such as a builder to arrange an estimated quote for any recommended property renovations.

Image showing a property for sale by auction in England
Property sold at auctions are not necessarily run down or derelict properties. Many houses and flats are ready to move in to. Photo © Jim Barton (cc-by-sa/2.0)

Instructing A Solicitor For A Property Auction

Despite the fast and sometimes hectic pace of a property auction, this is no excuse not to exercise due diligence when researching potential properties. Apart from the condition of the building, you need to find out about any problems with the building’s paperwork such as a short lease or defective legal title.

Each property put up for auction has a legal pack which pinpoints any special conditions of the sale or whether the property has any legal issues such as a disputed boundary fence.

It is a good idea to instruct a conveyancing solicitor as soon as you have decided to purchase a property at auction. In this way, they will be able to go through the fine print of the legal pack and inform you of any potential problems.

Instructing a solicitor in plenty of time is highly recommended because of the speed of the house buying process by auction. You will be expected to hand over their details to the auction house as soon as your bid has been successful. With only 28 days to finalise all the paperwork, instructing a solicitor beforehand will save you valuable time.

Photo of flats for sale in future UK property auctions
You normally have 28 days to finalise your winning bid when buying at a property auction in the UK, but check the terms with the individual auction house. Photo © Michael Westley (cc-by-sa/2.0)

How Much Do Auction Properties Cost?

Like any conventional property sale using an estate agent, the cost of property sold at auction depends on a number of factors such as age, condition and locality.

The Property Guide Price At Auction

When you receive the auction catalogue, you will see that all houses sold at auction have a guide price. This is the starting bid for the auction. You should not confuse this price with the reserve price which is the lowest price that the seller is willing to accept (and which remains confidential between the auctioneer and the seller).

The guide price at a property auction, or effectively the starting price, is not final and you may find that this price goes up in the weeks before the auction is held. It may even increase on the actual day of the auction. As the auction date approaches, you should keep an eye on the guide price and monitor any changes.

What is a reserve price at auction?

The property guide price is not the same as a reserve price. A reserve price on a property is the minimum amount the property will be sold for.

If the property auction fails to reach the reserve price the property will remain unsold at the auction.

A rising guide price is a clear sign that other buyers are interested in the auction property. Being aware of this fact will help you avoid disappointment on the day of the auction. It will also help you to keep your budget on track. Never assume a guide price is what the property is going to be sold for, this is almost never the case.

When planning how much you can afford to spend, you should factor in all the other costs associated with buying a property at auction in the UK. These include:

As far as auction property financing is concerned, you should also remember that you must pay 10% of the purchase price on the day of the auction as a deposit. This money will be lost if you are unable to pay the balance within 28 days of the property auction.

In such a situation, you might also be liable for the administrative costs of reselling the property at a later auction. If the seller feels that they had to resell the property at a lower price because your sale fell through, then you could also be sued for any perceived financial losses.

Image showing a house sold at a property auction
Houses almost never sell for the guide price at property auctions. Be aware of this when bidding starts as prices can greatly exceed the guide price if competition among bidders is high. Photo © M J Richardson (cc-by-sa/2.0)

Can You Get Mortgages To Buy Auction Properties?

It is possible to get mortgages for auction properties. However, applying for a mortgage can be a long-drawn-out procedure because lenders are required by law to do a thorough affordability and credit check before approving a loan.

With speed being an important factor in buying property at auction, you can save time by applying for a Mortgage in Principle (MIP) beforehand.

A mortgage in principle specifies that you could afford to borrow the set sum, but is not a guarantee that your mortgage will be approved. Before final approval, a mortgage survey and property valuation will need to be carried out for you to borrow money to buy that specific property.

There are certain conditions when a mortgage lender will turn down a loan application for an auction property. This is most commonly in cases when the lender believes that the property is not worth the asking price or when the property is in a dilapidated condition. Mortgages are usually granted for properties which are immediately habitable.

Therefore, if the auction property does not have a working bathroom and kitchen, then your application will probably be rejected. This is because the lender believes that the renovation costs will make it difficult – if not impossible – for you to repay your loan.

Derelict property for sale by auction
If the property for sale at auction is derelict or non-habitable, or made from non-standard materials, it may be difficult to borrow money to buy it. Photo © Peter Bond (cc-by-sa/2.0)

You will also find it difficult to get a mortgage for auction properties of non-standard construction which covers any materials apart from bricks and mortar.

If you encounter any difficulties with High Street mortgage providers, an alternative solution is to consult a mortgage broker who specialises in auction property financing.

They will have an in-depth knowledge of the UK property market and will be able to put you in touch with lenders who have experience of lending money for less conventional or unusual buildings.

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How UK Property Auctions Work

Once you have done the necessary research and preparation about a property up for auction, you are ready for the next step which is to attend an auction and to bid on your property of interest.

Before attending one, you should consult the auction house to find out what paperwork you should have with you. Auction houses usually ask you to bring a photo ID (such as a passport) and proof of your residence (for example, a utility bill).

You should also bring the contact details of your solicitor and a means of payment (for the auction house fees and the 10% deposit). This deposit should be in the form of a cheque, debit card or banker’s draft because cash and credit cards are generally not accepted.

House for sale at a UK property auction
If you are wondering how property auctions work in the UK, try attending a few first before making any kind of bid. Photo © Andrew Hill (cc-by-sa/2.0)

Register with the property auction

When you officially register, you should be given an addendum of any last-minute changes in the houses sold at the property auction. Check that the guide price of the property you are interested in has not risen overnight and that the conditions of sale remain unchanged.

At registration, you will sometimes be given a numbered card or paddle which you raise to notify the auctioneer of your bid. If you are not given one, you should raise your hand or the catalogue.

You should make sure that you arrive in plenty of time so that you can get a good seat at the property auction which allows you both to see and be seen.

A seat at the back and to the side is the best choice since it allows a clear view of the auctioneer as well as rival bidders. This means you can easily follow the bidding and know where and how much the current bid is.

Stick to your maximum bid amount

You should have already set the maximum you can afford to pay when calculating your auction property financing. Throughout the biding process, you should keep a clear head and keep this figure fixed in your mind.

It is very easy to get carried away at property auctions as someone bids against you for your ideal home and the price slowly rises. If you feel that you might be tempted to go over budget, you should take someone with you to keep you in check.

Never buy on impulse at a property auction

When being outbid on the property they want, another mistake that some people make at property auctions is to bid on a different property on impulse. This is because they do not want to leave the auction room empty-handed.

You should never bid on property which you have not inspected or had its legal pack reviewed. You might be lucky, but it can be a risky and above all, costly mistake.

Image of a derelict old house to be sold at auction
If you are outbid for the house or flat you are interested in at a property auction, NEVER EVER bid on another property you have not inspected. Photo © Eric Jones (cc-by-sa/2.0)

Proxy bidding at a property auction

You do not have to be physically present to bid at property auctions in the UK. If you feel that you might be tempted to make a larger bid than you can afford or might bid for a property on impulse, then you do not have to attend. Bids can also be made by proxy with someone biding on your behalf.

You will have to contact the auction house beforehand to arrange a bid by proxy. You will need to complete the necessary paperwork and name the maximum bid for your budget. You will also have to provide 10% of this figure as a deposit beforehand. Apart from proxy bids, arrangements can also be made for you to bid by phone.

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Online property auctions in the UK

Since the first online property auction in 2018, online property auctions are becoming increasingly common. These auctions work in exactly the same way as ‘real’ property auctions attended by bidders.

After the last bid, the auctioneer extends the clock by one minute to allow for any late bidders. Only after 60 seconds of silence does the hammer fall and the sale is completed.

Old house with structural problems
Be very careful what you bid on as there is no refund at a property auction. Any defects or problems will have been made clear by your surveyor or the building report. Photo © Trevor Littlewood (cc-by-sa/2.0)

The legalities of buying property at auction

You must make sure that you are 100% sure about buying a property for sale at auction because, unlike other purchases, it is not a situation where you can change your mind.

Once the auctioneer’s gavel falls, the highest bidders become the new owners of the property for sale. These bids are considered as legally binding as a signed contract. You are now liable for paying both the deposit and then arranging auction property financing for the balance within approximately 28 days.

Online property auctions are exempt from the 2014 Consumer Contract Regulations which are intended to protect consumers when they purchase something over the internet or by phone.

This is because an important aspect of property auctions is that you can arrange viewings and inspect the building’s paperwork beforehand. If you later find any major structural or legal problems, you cannot demand a refund as the seller provided full disclosure beforehand.

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Finalising the purchase of a property at auction

If you make the winning bid, you need to deal with all the administrative and financial details of buying at property auctions. You will have to sign the memorandum of sale and pay the fees to the auction house. You will also have to hand over 10% of your winning bid as a deposit. You should inform them of the contact details of your solicitor as well.

As soon as you become the legal owner of property, you become liable for building insurance even if the property is empty. This type of policy covers you for any damage to the bricks and mortar of the property such as in cases of flood, fire, etc. If you have spoken to your insurer beforehand, this can be arranged quickly.

Although your bid has been successful, you still need to ensure that there are no last-minute hitches in your auction property financing. If you have prepared and researched well, then things should slot into place.

However, it is imperative that you remain in regular contact with all parties involved (solicitor, mortgage provider, etc.) to ensure that everything stays on track within the tight time frame of a month.

House being renovated after buying at auction
If a property does not sell at auction, or it does not meet it’s reserve price, the auction house may have permission to sell the property for less. Photo © john mott (cc-by-sa/2.0)

If a property does not reach its reserve price, then it might remain unsold. In such cases, the auction house might have been given the authority to sell the property afterwards in a private sale. In such a situation, you should register your interest with the auctioneers and wait until the end of the sale. See our detailed guide to unsold auction property for more information.

Unfortunately, there is no guarantee of success at property auctions. If you leave the auction house empty-handed, you need to start the process all over again. Don’t be disheartened as the process of buying a property for sale at auction requires commitment, patience and perseverance.

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