Posted By Jessica Weisman-Pitts
Posted on February 11, 2022
Record-high property values continue to price millions of would-be buyers entirely out of the market. Across all regions of the UK, most types of properties are hovering at their highest average prices since records began.
Bargain hunters are setting their sights on alternative routes to affordable home purchase. Auction property sales in particular are proving popular, with demand for auction properties having grown significantly over the past year.
According to the latest figures from EIG Property Auctions, interest in auction properties has increased by around 15% since this time last year. Most of which has been attributed to the ferocious competition on the conventional housing market, resulting in skyrocketing house prices that continue to grow.
The Benefits of Buying Properties at Auction
An auction can be a fantastic place to pick up a property for significantly less than its true market value; repossessed homes that need to be sold fast, fixer-upper properties, non-standard or mixed-use residences – all regularly going under the hammer at auction.
As an added bonus, the deposit requirement payable for an auction property is just 10% – less than the minimum requirements of many mainstream mortgages.
Plus, buying a property at auction eliminates the risk of being cheated. If yours is the winning bid, the property is yours at the indicated price.
Paying For an Auction Property
Properties purchased at auction need to be paid for in full within 28 days. Far from an issue, this can make for a significantly cheaper and faster transaction than any conventional property purchase.
For example, a bridging loan taken out against your current home can be used to fund the purchase. Bridging finance can be arranged and accessed in a matter of days; a far cry from the weeks or months needed to process a mortgage application.
Repaid a short time later when your current home sells, bridging finance can be hugely affordable – often with monthly rates of interest of less than 0.5%.
Personal savings and other credit facilities can be used to pay for an auction property, just as long as the funds can be produced within the 28-day limit.
Preparing for a Property Auction
Picking up a bargain property at auction is as much about careful planning as it is being in the right place at the right time. There are several important things that need to be done in advance of the auction itself, including the following:
- View the Property in Person
Auction properties are often sold at hugely discounted prices due to their extensive repair and renovation requirements. It is therefore essential to perform an in-depth inspection of any such property you intend to purchase – ideally under the watch of a qualified professional.
- Get Your Finances in Order
Ensuring you are eligible for the financial product you need to purchase a home at auction ahead of time is essential. Consult with an established bridging loan broker to discuss your eligibility; your budget and which products (like bridging finance) are available.
- Consider the Additional Fees and Charges
Remember that there will always be additional fees and charges to pay on top of the property’s purchase price. Most auctioneers charge an administration facilitation fee, which varies from one auction house to the next.
- Budget for Repairs and Renovations
Do not make the mistake of leaving yourself with insufficient funds leftover to cover the necessary repairs and renovations. Budget carefully and consider exactly how much it will cost you to get the property into a suitable state of repair; this is where auction finance can come in handy.
Further information can be found online at websites such as bridgingfinance.com which explain the process in more detail.
About the Author:Craig Upton supports UK businesses by increasing sales growth using various marketing solutions online. Creating strategic partnerships and keen focus to detail, Craig equips websites with the right tools to rank in organic search. Craig is also the CEO of iCONQUER, a UK based SEO company and has been working in the digital marketing arena for many years. A trusted SEO consultant and trainer, Craig has worked with British brands such as UK Property Finance, Serimax, djkit and also supported UK doctors, solicitors and property developers, gain more exposure online. Craig has gained a wealth of knowledge using Google and is committed to creating new opportunities and partnerships.
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