Auction Purchase Details
Frequently Asked Questions
How does buying at a property auction work in the UK?
At a traditional UK property auction, if you win the bid you exchange contracts immediately and pay a 10% deposit on the day. You then have 28 days to complete (pay the remaining 90% plus all costs). This means you need your finances arranged before bidding — bridging finance or cash — as there is no time for a standard mortgage application.
What is a buyer's premium at a property auction?
A buyer's premium (also called an administration fee or buyer's fee) is charged by the auctioneer in addition to the hammer price. It typically ranges from 3% to 5% plus VAT (20%), or may be a fixed fee of £2,000–£5,000 plus VAT. The buyer's premium is payable on the day of the auction along with the 10% deposit, so factor this into your maximum bid.
Do I pay SDLT at a property auction?
Yes — SDLT (Stamp Duty Land Tax) is calculated on the hammer price (not including the buyer's premium). SDLT must be submitted to HMRC within 14 days of completion. The standard residential rates apply, plus the 3% surcharge if you already own another property. SDLT can be a significant cost so always calculate it before bidding.
Can I get a mortgage to buy at property auction?
Standard mortgages are rarely suitable for traditional property auctions due to the 28-day completion requirement — mortgage applications typically take 4–8 weeks. Most auction buyers use either cash or bridging finance, which can complete in 5–14 days. Some 'modern method of auction' (conditional auction) listings allow up to 56 days and permit standard mortgages.
What due diligence should I do before bidding at auction?
Before bidding at auction you should: pay for a RICS survey (£400–£800), instruct a solicitor to review the legal pack (£300–£500), check planning restrictions, review title and boundaries, assess potential defects, and confirm your finance is in place. You cannot pull out after the hammer falls without losing your deposit, so all checks must be done in advance.