These usually offer terms from one month to two years, so make sure you know how you are going to pay it back and double-check interest rates. You may need to get a bridging loan if you are going to struggle to pay that much cash quickly. Within this, you have to exchange and pay a 10% deposit within 28 days and then you get a further 28 days to complete. You then have 56 days to complete the process. If you are then the winning bidder you put down a reservation fee, usually around 5% of the purchase price. How does the mortgage work? Well, you'll need a lot more cash.īuying via auction requires a lot of cash compared with the traditional method, where you might get a mortgage with a deposit as low as 5%. They can give their opinion on the cost of any renovation work. It could be useful to take an expert with you, like a surveyor, builder or architect. You should be able to view the property before bidding – contact the agent on the listing to enquire. Make sure you know the property market in the area well so you don't overbid. You can (usually) submit a bid online up until a certain time and date. There is usually a reason a home goes up for auction – it may be in dire need of renovation, so any money you save could be needed on repair work.Īuction properties are usually listed online for about a month before they sell, and there will be some kind of reserve price. In the past, auctions were favoured by cash buyers or investors, but now it is possible to buy an auction property with a mortgage, and even first-time buyers are finding them a good way to get on the property ladder. Property auctions can be a good way to buy a house quickly, and there certainly are bargains to be had. But in some places, like the North East, it can make up as much as 5.3% of regional listings.Īccording to data from Moverly, stock is lowest in London (1.3%) and the South East (1.4%). In the UK, auction properties account for 2% of the homes on the market.

By Megan Baynes, cost of living specialist

The long walk a trek to freedom