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Property Bargains at Auction Houses

Tuesday, 26th February 2013

Categories: Sales Lettings Property Prices

Author: Peter Barry

While house prices in key London locations remain buoyant, many landlords – or those looking to invest in property – are having to work harder to find a bargain. Whilst it might seem as though the continuing economic crisis would throw the property world into disarray, London is ticking along quite nicely, with increased rental prices and good properties still attracting good offers. However, head over to the auction houses and it’s another story.

Canny house hunters and landlords in the know are snapping up bargains by putting a punt on homes going under the hammer. According to Essential Information Group, there has been an increase in the number of properties sold, when compared to last year’s figures, with over 80 per cent of the lots selling at auction. However, the actual prices paid are less than transactions completed privately. So, why is it that houses are earning less at auction? Well, for starters, you need to have your finances in place when you raise your card in an auction house. You have to cough up the deposit as soon as you win the bid and then you have just 28 days to pay the balance for the property. Which means only those with a serious property portfolio or a good bundle of cash under the mattress can realistically get involved.

There is also the uncertainty about what you’re buying. Whilst you do usually have the opportunity to look around a property before the auction date, this might involve a quick walk round on a busy open morning. Plus, you won’t necessarily have the benefit of a surveyor’s advice and will have to bid on instinct. If you don’t have builders and trades on tap to knuckle down and do the dirty work, an auction property can be off-putting for the fainthearted. With this level of uncertainty in these straightened times, it’s not hard to see why auction properties can be such a bargain.

That’s not to say that every property at every auction needs serious structural work and months of refurbishment. Some houses are just victims of bad timing, whilst others require a quick sale to release funds to family or a financial institution. It’s possible to strike gold but you’ll need nerves of steel to hit the jackpot.