Photo by Hayhurst Estates

Where has the year gone? Lately we’re seeing more investors and homebuyers choosing to buy property at auction, so it feels like the perfect time to share some practical hints and tips.

Many of these also apply to tricky properties in general, so it’s worth a read even if an auction isn’t on your immediate horizon.

Before the Auction: Due Diligence

Start by really checking your auction pack – there’s a lot of information in there.

• Timescales for completion. These are usually 28 days, but there can be variations.
• Land Registry details. Confirm the title plan and ownership match what you expect to buy. Look into current owners and charges. If it’s a company, check Companies House for charges and whether it’s solvent. You’ll also see when they bought the property and at what price, which can indicate their expectations. Reading through the special conditions can also hint at why the property is being sold, as well as confirm timescales.
• Planning clues. Several properties are sold without correct planning, which can cause problems. Look for historic sales particulars on Rightmove, check the local planning portal thoroughly (all tabs), and review EPC certificates for consistency with your expectations.
• ASTs (Assured Shorthold Tenancies). Be careful when buying with tenants in place, as they add complications. You may need to factor in time for possession or refurbishment. Be particularly cautious with protected/regulated tenants, as lenders won’t usually provide term mortgages where they are present.
• Leases. If the property is leasehold, check the lease length and any sub-leases. Short leases can be problematic. Ask your broker what’s possible – extending a lease isn’t quick and requires you to have owned the property for a period before you can start.

Visit the Property

Nothing beats seeing the property in person.

• Be prepared – consider bringing a builder if there are concerns like cracks or damp. Draft a schedule of works and costs, so you’re ready if you go ahead.
• Check for tenants and, if possible, talk with them about their plans and willingness to move.

Set Your Limits

Make sure the figures stack up with the ROI you expect. Set a ceiling price and stick to it – every pound above it cuts into your profit. Auctions can get competitive, with both investors and homebuyers bidding, so don’t assume you’re the one misjudging.

Broker and Solicitor Support

A good broker will review concerns with you before the auction, including options for bridging and term finance. Most bridging lenders now want the deal to work as an investment, even if that’s not your plan, so make sure it stacks up.

Line up your solicitor in advance – they are key to getting the deal completed. Use someone you trust, or ask your broker for a recommendation. Check they have both the experience and the capacity to meet deadlines. Ideally, they’ll also keep your broker copied in so momentum isn’t lost.

Think Like a Lender

Always consider the deal from a lender’s perspective. They look at how they’d dispose of the property if things went wrong, usually assuming it’s vacant. That’s why they focus on planning and the property’s current state, not its potential. If you adopt this mindset, your figures are more likely to align with a valuer’s.

Be Ready to Move Fast

Exchanging at the auction means you’ve bought the property. With only 28 days (calendar days, not working days) to complete, you must be ready. Ensure your deposit and refurbishment funds are already in place.

As always, please give me a call if I can help. You can also book a call here.

About the Author:

Ellie Broadhurst is a specialist mortgage broker working at Baya Financial in partnership with The HMO Roadmap. She works with HMO property investors throughout their journey, from clients starting on their first project through to experienced portfolio landlords and developers. Learn more about Ellie here.