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.

Property prices in London can sometimes be a little crazy and property auctions are no different. Stick to your budget and make a finish line for bidding. In the heat of a fast-paced London property auction it’s easy to get carried away.

Property Prices In London

There are regional differences in property prices in the UK. Annual growth for property prices in London up to March 2020 was 4.7% with the price of a house averaging out at £486,000. Prices are higher in Inner London which had an average of £588,700 compared to £424,200 in Outer London.

Most homes sold in London are flats which are advertised at an average of £554,663 whilst terraced properties sold for an average of £687,411. Auction properties in London can be a lot cheaper than those sold through normal channels. You can expect to see a guide price of £300,000 for a 2-bedroom apartment. Property prices in London vary depending upon which area you choose to search.

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Where Should You Search for Auction Property In London?

Location and budget are the two main factors to consider when searching for auction properties in London. Transport and infrastructure should not be a problem but you should take into account how close you want to be to good schools, shopping outlets and bus or tube routes. Below are some of the areas you could consider when looking for auction properties in London.

Blackheath (SE10)

Blackheath is only 25 minutes away from the city but has the feel of a village. The area has many Georgian properties and prices are around 8% lower than central London. You can get a 2-bedroom maisonette for around £240,000. Blackheath station has rail services to major stations in the city and excellent bus services so it is ideal for commuting.

Streatham (SE27)

Streatham is in South West London 5 miles from Charing Cross. There is a variety of types of property and prices come in around 13.4% below the average for London. A 1-bedroom flat can be bought for around £75,000 at auction. Streatham has excellent schools and good shopping facilities. If you are looking for a leafy suburb with good links to the city centre then this area is one to consider.

Clapham (SW12)

Famous for the Common, Clapham is one of the up and coming trendy areas of the city. There are good transport links and a family friendly atmosphere. The old town has lots of restaurants and pubs. In Clapham you can find purpose built flats with prices circa £378,000 for a 2-bedroom. Apartments in Victorian houses will usually have larger rooms but if you own a car, parking should be taken into consideration. A 3-bedroom terrace house will attract a guide price of £475,000.

Bethnal Green (E1)

The East End of London has now become one of the most desirable places to live. Prices are on the rise but you can still get a 1-bedroom flat in a block for £290,000. There is easy access to central London and a vibrant local nightlife. Many of the schools in Bethnal Green have been rated outstanding. Bethnal Green has tube stations and overground railway routes.

Camden (NW1)

One of the more expensive areas in the city, Camden has a lot to offer. Open air street markets, restaurants and pubs make this area an exciting prospect but you can expect to pay more for a property. There are excellent transport links by bus and rail to the city as well as cycle tracks. A 2-bedroom apartment can cost around £800,000 but there are also flats that are advertised at around £120,000.

Image showing difference between London property prices and other areas of England
Source: Office for National Statistics – House Price Statistics for Small Areas, Annual Survey of Hours and Earnings

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.

Five Reasons To Buy Auction Properties In London

1. London Is An Exciting Place To Live

No one can deny that London is one of the most exciting cities in the world. You can live close to the centre and have access to theatres, restaurants, bars and markets. There are also many beautiful suburbs where the lifestyle is more relaxed but where you can also easily access the centre due to the excellent infrastructure.

2. Property Is Easy To Sell In London

London is one of the busiest property markets in the world. Investing in a low cost property in London can be a good investment and due to the high number of property buyers, selling a house or other property in London can be easier than many other parts of the country. While some costs are higher, as are the London property prices, the capital also enjoys the highest rate of value increase in the UK. This makes acquiring a suitable property at auction in London a sound proposition.

3. The Cost Of Living in London

Many people cite the cost of living as a reason not to move to London but forget that salaries in the capital are higher than elsewhere. Additionally, property prices in London go up faster than in any other part of the UK.

4. London Is A Transport Hub

London is a hub for transport. You can get anywhere you want to go using the Tube, the railway or buses. Routes to other cities are well served and you can even get to Paris by the Eurostar. Good transportation makes London very attractive for commuters.

5. The Historic Buildings And London Skyline

London must have more historic buildings than almost any other capital city. There are also new buildings and structures which contribute to the unique skyline which is recognised throughout the world. These include the London Eye, the Shard and the Gherkin. You can find Roman architecture, Tudor buildings and Royal palaces so there is always something to see.

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.

What Type Of Property In London Should You Look For?

As you would expect of the capital city you can find all kinds of property sold at auction in London. Commercial and industrial properties are plentiful and residential properties include detached, semi-detached, terraced and both purpose built flats and apartments within older houses. Locations will dictate prices.

Residential Auction Properties In London

The size of London means that whatever type of residential property you want you will be able to find it. Whether you prefer to live in a built up area close to the city centre or a suburb where it is quieter with more open spaces there are lots of options. Architectural types include terraced homes, Victorian villas, post-war semis and mews cottages as well as an array of flats.

Commercial Properties For Auction In London

London has many commercial auction properties. You can find empty shops and warehouses that are suitable for retail premises. Office space in SE4 can be purchased for around £10,000 but commercial property in Portobello Road will cost upwards of £1,000,000. There are also bars, restaurants and clubs that can be purchased at auction. Those located close to the centre are priced accordingly but you can get a retail property in Leytonstone for about £65,000.

Buy-To-Let Auction Properties In London

Demand for housing in London is always high so purchasing a buy-to-let auction property can be a good investment and will bring in a high income. In a place like Bermondsey you can expect to ask rental of £2,000 per month for a 1-bedroom apartment. A typical rental price in Brixton is circa £1,300 per month.

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

Auction Properties (Home Page) – UK Property Auctions