Auction Properties in London

Auction properties in London, UK
London is one of the most popular areas to buy auction properties

Auction Properties in London

Why Look for Auction Properties in London?

The UK capital has the highest property prices in the UK and buying auction properties in London can be the most suitable option for someone who is looking for a home at a reduced rate. It is estimated that repossessions, homes put up for auction by mortgage providers, can have a guide price of up to 60% less than the same property would have demanded through an estate agent. Although bidding can drive up this initial price, it is still possible for home-buyers to pick up a bargain through a London property auction.

Buying auction properties in London is also popular among property investors – whether that is someone looking to invest some money in a single buy-to-rent property or someone who wants to add to their existing property portfolio. The demand for rental property far outnumbers its availability so buying property in the capital is a definite money earner and investors know that it will retain its value.

Finding Auction Properties in London

Of the estimated 400 houses dealing in auction properties in the UK, the vast majority are located in the capital. Some feature properties from all over the UK while others concentrate exclusively on auction properties in the Greater London area.

The easiest way to find property for auction in London is to visit a variety of auction house websites. Most allow you to refine your search by the use of filters. You can be as general or as specific as you like. If you have specific criteria, you can use search parameters such as:

  • the location (by postcode/neighbourhood) and the acceptable range (within miles)
  • the price of the property
  • property types (residential vs. commercial or detached, etc.)
  • number of bedrooms if it is a residential property
  • special features e.g. with a garden or outbuildings

An alternative is to visit the website of the Essential Information Group (EIG). Their website portal has details of over 850,000 properties which have previously been sold at auction while their property register is updated every month as more lots of every auction in the country are added to their database. This can give you an insight into what prices auction properties have demanded in the past and what you might expect to pay.

Narrowing Down Your Search for Auction Properties in London

Once you have an overview of all available auction properties in London, you are ready to narrow down your search. Each auction house prints catalogues about 3-4 weeks before the auction will be held although it is often available online a few days beforehand. You should therefore contact the auctioneers and ask for a copy of their catalogue and/or ask to be added to their mailing lists.

Never rely solely on these catalogues as the basis for your property purchase. You should never bid at an auction unless you have viewed the property in question. Auctioneers will be able to give you a list of fixed viewing times (open to all). Alternatively, you could contact them to arrange a private viewing. If you are no property expert, it might be a good idea to go with someone who is or ask a builder to accompany you. They will be able to point out any potential structural problems or issues caused by poor maintenance.

Once you have decided among all the houses put up for auction in London, you should arrange for the property to be surveyed. How much you pay for a survey will depend on how detailed it is. They vary in price from £300-£2,000+. As a general rule, the older and more badly-maintained the property, the more detailed the building survey should be.

As well as investigating the structural integrity of houses sold for auction, you should also have the legal pack of the property checked by a solicitor. This will ensure there are no unpleasant surprises in store for you in the future such as a defective legal title or restrictive covenant.

Common questions about auction properties in London

How can I find auction properties in London?

You can find auction properties for sale in London by viewing specific property auction websites, attending a live auction in your area of interest or speaking to bank about properties put up for auction. In the case of properties auctioned by banks, such as repossession properties, the list of available property tends to be issued on a monthly basis. Check with your bank about any property they intend to sell by auction.

How much are auction properties in London?

The price of an auction property in London depends on the kind of property you intend to buy. Usually a guide price is given for any property being auctioned, and the guide price can often be seen as the starting price. In most cases a property sold at auction will be cheaper than the normal market value but higher than the guide price. A good idea is to attend a property auction without bidding, this will give you an idea of prices and how a property auction in London works.

Can I get a mortgage or loan to buy an auction property in London?

Yes, you can obtain finance in the form of a mortgage or loan to buy an auction property, but you must make sure you have a mortgage offer before bidding. It is imperative you have the finances in place to pay for the property should you win the auction. In addition, most property auction houses expect the winning bidder to pay 10% of the winning bid, plus the auction fees upon completion of the auction. Check with the property auction company before you place a legal bid on any property.

Financing for Auction Properties in London

Some potential buyers sell their home beforehand and move into rented accommodation until they find their dream home among all the auction properties on offer. The advantage of this strategy is that it allows them to release the equity in their old home to pay the initial 10% deposit and the other associated costs of buying houses sold at auction.

You have a number of other options when arranging to finance the purchase of auction properties in London. Mortgage providers will approve loans, but you need to work fast so that the paperwork is completed within the 28-day deadline. Before applying for a MIP, you should check the mortgage provider’s lending criteria. For non-standard buildings, specialist mortgage brokers might be able to recommend other lenders apart from mainstream banks and building societies.

If you believe that the auction property financing will not be in place, a short-term bridging loan (also known as an auction loan) might be suitable for you. Despite their higher costs and fees, approval and funding are available within days rather than weeks.

How To Buy Auction Properties in London

Bids on auction properties in London can be made in person, over the phone or sometimes on the internet. You can also ask the auction house to bid by proxy if you prefer.

When you attend the auction house, it is crucial that you do not allow your emotional attachment to the property make you get carried away. You must stick to your budget. If you are outbid, do not impulsively bid for other houses sold at the auction. Without a viewing, survey, and a review of its legal pack, you might find yourself with an auction property which has major structural and/or legal issues.

If you are outbid, walk away, learn from the experience and start your research all over again. Buying auction properties in London requires patience and preparation.

Useful property resources:
London councils housing and planning
Council tax bands for England and Wales

Auction Properties (Home Page) – UK Property Auctions