Auction Action: How to Buy Property Without Losing Your Shirt
- Micah
- Aug 29, 2025
- 4 min read
If you’ve ever watched a property auction and thought, “This looks like a thrilling way to spend a Tuesday,” you’re not alone. Auctions are fast-paced, dramatic, and occasionally involve someone accidentally buying a derelict pub in Stoke-on-Trent. But beneath the adrenaline and the auctioneer’s hypnotic chant lies a serious opportunity—and a few landmines.
Whether you're a seasoned investor or a wide-eyed first-timer, this guide will help you navigate the auction world with your wallet (and dignity) intact.
The Rewards: Why Auctions Can Be Brilliant
1. Speedy Transactions
Auctions are the Usain Bolt of property buying. Once the hammer falls, contracts are exchanged immediately, and completion usually follows within 28 days. No chains, no delays, no estate agents sending you “just checking in” emails every 48 hours.
2. Transparency
Unlike private sales, where offers are made in hushed tones and sealed envelopes, auctions are gloriously open. You see what others are bidding, and you know exactly where you stand. It’s like poker, but everyone’s cards are face-up and the stakes involve bricks and mortar.
3. Potential Bargains
If you’ve got a keen eye and a tolerance for properties described as “full of potential” (translation: needs everything), you might snag a deal below market value. Investors love auctions for this reason—buy low, refurbish, refinance, repeat. It’s the property version of alchemy.
4. Access to Unique Properties
Auctions often feature properties that don’t make it to the open market—repossessions, probate sales, commercial units, and the occasional chapel. If you’re looking for something a bit different (or just really like stained glass), auctions can be a treasure trove.
The Risks: What Could Go Wrong (Besides Everything)
1. No Cooling-Off Period
Once the hammer drops, you’re legally committed. There’s no “I changed my mind” clause. If you fail to complete, you’ll lose your deposit (usually 10%) and may be liable for further costs. So maybe don’t bid while sleep-deprived or emotionally compromised.
2. Limited Due Diligence Time
Auction properties come with legal packs, but you’ll need to review them before the auction. There’s no time for leisurely surveys or second opinions. It’s a bit like speed dating, but with structural reports and restrictive covenants.
3. Hidden Costs
Some properties come with tenants, structural issues, or legal complications. Others come with none of those things but still manage to cost you a fortune in unexpected repairs. Always factor in a contingency budget. And then double it. Possibly triple it if the roof looks “quirky.”
4. Overbidding
Auctions are emotional. You’re in a room full of people, the auctioneer is doing their rhythmic chant, and suddenly you’re bidding £20k over your limit because someone in a pinstripe suit raised their paddle. Set a maximum bid and stick to it. Even if the property looks like it could be the next Shoreditch loft conversion.
5. Legal Pack Surprises
The legal pack might contain restrictive covenants, rights of way, or planning issues. Or it might be missing key documents entirely. Always get a solicitor to review the pack before bidding. If you don’t understand the phrase “flying freehold,” you probably shouldn’t be bidding yet.
6. Financing Fails
If your finance isn’t ready to rock, you’re in trouble. Auctions move fast, and lenders don’t. If you can’t complete within the deadline, you’ll lose your deposit and possibly face legal action. More on this below.
Raising Finance for Auction Purchases
Ah yes, the money bit. Because unless you’ve got a suitcase full of cash (and a very understanding accountant), you’ll need to sort your funding before you bid.
1. Bridging Finance
This is the go-to option for auction buyers. Bridging loans are short-term, fast-arranged loans designed to “bridge” the gap until you can refinance or sell. They’re ideal for auctions because they can be arranged quickly—sometimes within days—and they don’t require the property to be habitable (which is handy if the roof is currently in the garden).
Pros:
Fast approval
Flexible criteria
Can be used for uninhabitable properties
Cons:
Higher interest rates
Short repayment terms
Fees can add up (arrangement, exit, valuation, etc.)
2. Cash
If you’ve got it, use it. Cash buyers are the auctioneer’s dream—no delays, no finance hiccups, just pure liquidity. But make sure you’ve accounted for all costs, including stamp duty, legal fees, and any immediate repairs.
3. Mortgage (with caveats)
Standard mortgages are tricky for auctions. Most lenders can’t move fast enough, and many won’t lend on properties that need significant work. If you’re planning to use a mortgage, speak to a broker beforehand and get a decision in principle. But be warned: if the property isn’t mortgageable, you’ll need a Plan B.
Need expert property finance advice?
Common Pitfalls to Avoid
1. Not Viewing the Property
Photos lie. Always view the property in person. Ideally in daylight. Ideally not during a storm. If you can’t view it yourself, send someone who knows what rising damp looks like.
2. Ignoring the Guide Price
The guide price is just that—a guide. It’s not the actual value, and it’s often set low to attract interest. Don’t base your budget on it. Do your own valuation and stick to it.
3. Assuming You Can Get a Mortgage
Just because a property has walls doesn’t mean it’s mortgageable. Lenders have criteria, and “charming ruin” isn’t one of them. If the property lacks a kitchen, bathroom, or roof, you’ll need bridging finance.
4. Skipping the Legal Pack
The legal pack is your bible. Read it. Or better yet, pay someone clever to read it. Look out for:
Title issues
Planning restrictions
Tenancy agreements
Service charges (for flats)
Special conditions (e.g. buyer pays seller’s legal fees)
5. Underestimating Renovation Costs
If the property needs work, get quotes before you bid. And remember: builders are optimistic, and your budget should not be. Add a buffer. Then add another buffer. Then cry softly into your spreadsheet.
Final Thoughts
Buying property at auction can be exhilarating, profitable, and occasionally disastrous. But with preparation, a good solicitor, and a firm grip on your budget, it can be a brilliant way to acquire property—especially if you’re an investor or developer looking for opportunities that don’t come with scented candles and estate agent jargon.
Just remember:
Do your homework
Sort your finance
Read the legal pack
View the property
Stick to your budget
Need expert property finance advice?
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