How To Buy Property At Auction In London?

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As London property prices continue setting new highs annually, buyers today face extreme challenges securing affordable housing across both sales and rental sectors. Estate agent listings remain out of reach for many. However, one acquisition route growing massively in popularity involves buying at a property auction. Offering prospects to tap into real discount deals below market rates, those prepared to research, bid confidently and act fast after the hammer falls can gain London property footholds unlocking future prosperity. But in such a frenzied environment, what practical steps assist buyers in maximising opportunities when participating in London auctions?

Getting to Grips with the London Auction Market

Dozens of commercial London auction houses conduct rolling sales across England’s capital city each week. Between major powerhouse brands like Allsop, Barnard Marcus or Savills and smaller bespoke independents trading specific borough niches, tremendous choice exists for buyers evaluating where to participate. Catalogue events routinely listing 150-250 properties dominate chief auction channels, although some pioneering operators like McHugh & Co. also host online sales allowing remote digital bidding alongside traditional live room events. Whether attending physical venues or tracking portals, buyers should thoroughly research upcoming lots appraising every detail possible about target properties – locations, types, sizes, planning constraints and indicative condition reports or rental potentials. Auction listings often sell in ‘as seen’ condition with limited seller liability around defects post-purchase, unlike private sales. Evaluating suitability against investment of renovation goals before participating remains key.

Attending Viewing Days

Once registering initial interest on targeted auction properties after cataloguing sessions finish, ensuring attendance when subsequent viewing days get scheduled proves critical to gaining full first impressions physically. While most sellers allow access internally, inspecting exteriors, street settings and neighbourhood ambience also assists in gauging desirability from future occupant or resale perspectives. Speaking with local agents or neighbours fathoms buyer demand levels in each micro-area too. If constraints prevent personal visits, appointing representatives to attend on your behalf gives invaluable property eyeballing before bidding remotely later. But with London spanning 600 square miles in reality, assessing travel times to central London workplaces also factors when evaluating commuter belt potential purchases.

Setting Bidding Limits

Having researched target properties fully, buyers should rationally formulate their own independent private valuation guidance ranges. These internal benchmarks help anchor realistic top-level positions and come to the bidding drama later when adrenaline risks overruling disciplined minds! Considering recent area sales values for equivalent-sized properties, factoring refurbishment potentials then deducting likely building upgrade costs and fees gives broad guide pricing levels to work within. This aligns bids to local marketplace conditions avoiding overpaying. As most properties sell at or slightly above published guide prices plus buyer premiums, focusing maximum positions scraping above the highest estimate figures makes auction budget sense allowing some negotiating movement leeway. Staying grounded around property business case potentials rather than chasing home ownership dreams alone remains key.

Securing Finance Before Bidding

Crucially buyers require funding fully in place before participating in property auctions serious about securing purchases. Unlike traditional private sales allowing house purchase negotiations over months pending slow mortgage applications, auctions necessitate ready financial durability to transact deals rapidly. With deposits of 10%+ payable instantly when winning bids get agreed upon, only cash buyers or those holding proof of mortgage pre-approvals stand any chance of acquiring homes. Even funding renovations and refits requires planning via development finance from providers like MT Finance if they intend significant upgrade works post-purchase. Without secured financing assets in place with funds transferable in principle, wasting time bidding risks painful losing out moments after the final hammer falls!

Bidding Strategies & Techniques

Sale day atmospheres prove fast and frantic once bidding commences. Having registered your details beforehand providing identification and payment of refundable bidding deposit cheques, listen carefully as auctioneers describe properties bringing these forward seeking opening bids. If interested in particular lots, signal your intent to get paddles raised high up early. This registers presence with the auctioneer and room as serious bidder player participation. As mentioned, pre-agree with your upper limits and stick firmly to these however caught up in bidding momentum temptations to continue beyond ceilings. Sometimes long silent pauses by auctioneers seek to pressure bidders hovering close to reserve thresholds into dipping their hands into pockets once again. Stay strong! On other occasions, underbidders also suddenly re-enter proceedings having dropped previously after slight bidding lulls. This sees increment values rapidly escalate again dramatically. But for those buyers who have done homework around property market rates realistically, such psychological tactics get ignored focusing only on maximum affordable positions. Winning bids too cheaply please no one in the long term!

Going Once, Going Twice – SOLD!

Where bidding exceeds your limit thresholds, simply lower paddles adhering strictly to pre-agreed ceilings and watch rivals battle onwards without you. But if successfully attaining winning bid status as the hammer definitively falls in your favour, you have purchased a London property! Exchange legal contracts immediately with the auctioneer paying agreed deposit cheques before leaving the auction premises. Ensure all contact details get updated and completion date terms are registered allowing solicitor transfers concluding sales formally over the next 28 days. Then exciting renovation or simple move-in journeys can begin! For buyers aiming to tap into London’s high-growth property market through auction mechanisms, thorough preparedness and planning lie behind those able to regularly navigate myriad sale day dramas securing real value deals others overlook. Stay rational around property potentials, financially equipped through secured lending to transact purchases with confidence.

Top Tips for Maximising London Auction Purchase Success

If looking to purchase London flats, houses or commercial premises via competitive auctions, what other top tips assist likely bid success beyond the points covered already?

Weigh Transport Links Carefully

High-density London living relies on efficient infrastructure for functioning family activities and positive well-being. When reviewing potential purchases, check proximity to rail stations, tube access, bus routes, motorway links or international airports depending on priorities. Journey times quicken or hamper daily dynamics immensely.

Factor Reputations & Demographics

Background research should consider area reputations and also assess likely ongoing occupant demands based on predominant demographics. Some neighbourhoods house high transient renter ratios for example while others contain high owner-occupier consistency. Such profiles influence future introduction likelihoods or community participation opportunities so merit consideration.

Consider Freeholds Versus Leaseholds

In older inner London zones especially, many flats sell on tight leasehold tenures whereas outer commuter belt houses tend towards freehold titles. Make sure differences get factored into pricing models as remaining lease lengths under 80 years soon hamper mortgage lending capacities while freeholds enable full building control liberties and avoid ground rent demands.

Collate Evidence Before Bidding

As limited seller disclosure applies at auctions, buyers should access Land Registry history records plus order property MOT surveys wherever possible beforehand checking for defects risks from flooding through to subsidence. What you cannot see at viewings may proceed to bite you long after auction halls empty!

Conducting thorough due diligence across myriad factors beyond just headline bidding levels separates successful London property auction purchasers from frustrated ones paying the price later for naive haste. Patience and planning pay despite the fast pace.

Conclusion

When weighed against traditional London estate agency offerings, property auctions present distinct opportunities for buyers priced out of prohibitively inflated mainstream markets today. Leveraging auction mechanisms smartly facilitates potential value acquisitions securing initial footholds ahead within the world’s premier global city still. Yet exploiting chances relying on limited seller disclosures around sometimes unsurveyed homes demands diligence mitigating risks. For committed calculative bidders who plan carefully, research thoroughly and bid rationally, lucrative investments or affordable home spaces await the pound of a hammer within reach at last, however. London auction rooms host both dreams and nightmares with little middle ground based on evidence so far! Choose wisely and positive outcomes reward those taking care to take informed measures.

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