Buying property at auction.

Auctions are where the value-add stock lives — blocks, tired houses, HMO conversions, mixed-use. The trade-off is certainty against speed: when the hammer falls you’ve exchanged, and the clock is already running.

Traditional vs modern method

Traditional: the fall of the hammer is exchange. You pay a 10% deposit on the day and complete in around 28 days — too fast for a mortgage application, which is why traditional auction buyers use cash or bridging. Modern method: you pay a non-refundable reservation fee (often around 4–5%, with a minimum, and usually on top of the price) and get about 56 days — long enough for a mortgage if everything goes right. Factor the reservation fee into your real price: £10,000 on a £200,000 lot is a 5% premium before you start.

The legal pack is the deal

Every lot has a legal pack — title, searches, leases, special conditions. Read it (ideally with your solicitor) before bidding, because the special conditions are where the surprises hide: buyer’s premiums, seller’s legal costs charged to you, short leases, restrictive covenants. The guide price is marketing; the reserve is the real floor, and additional fees can add thousands to the hammer price.

Finance before, not after

With 28 days to complete, finance is arranged before auction day: bridging terms agreed in principle, valuation access sorted, solicitor briefed. A bridge typically advances the lower of 90% of the price and 75% of the value — run the cost over your realistic term in the bridging calculator and remember the exit (refinance or sale) has to clear it.

Set the max bid by working backwards

The discipline that separates auction winners from auction casualties: decide the most you can pay before the room heats up. Start from the end value, subtract the refurb, all purchase costs (SDLT, auction fees, legals), the finance, and the profit or equity you require — what’s left is your ceiling. Shape the deal at two or three purchase prices in the Deal Shaper and you’ll know exactly where “winning” becomes losing.