This article is for general information only and does not constitute financial or investment advice.
Property auctions sell around 30,000 residential lots per year in the UK, according to the Essential Information Group. Auction prices tend to sit 10% to 25% below estate agent market prices because buyers need cash or fast finance, completion deadlines are tight, and many lots have complications that put off mainstream buyers.
Two auction formats operate in England: traditional and modern method.
Traditional auction
The auctioneer sets a guide price and a reserve price (the minimum the seller will accept, not disclosed to bidders). Bidding happens in the room or online. When the hammer falls, the winning bidder has a binding contract. They pay a 10% deposit immediately (by banker's draft or debit card) and must complete the purchase within 28 days.
If you cannot complete within 28 days, you lose your deposit and may face additional damages. This is why most auction buyers use cash or pre-arranged bridging finance. A standard BTL mortgage takes six to eight weeks, which is too slow for a 28-day completion.
Modern method of auction
The modern method (also called conditional auction) gives more time. The winning bidder pays a reservation fee (typically 3% to 5% of the sale price, usually non-refundable) and then has 56 days (sometimes longer) to complete the purchase with an exclusivity agreement.
Fifty-six days is enough for a standard mortgage application. This opens auctions to buyers who do not have cash or bridging arrangements. The trade-off is the reservation fee, which is an additional cost on top of the purchase price.
Before the auction
Download and review the legal pack for every lot you are considering. The legal pack includes the title register, property information form, searches, special conditions of sale, and any tenancy agreements. Have your solicitor review it before you bid.
Check the legal pack for: restrictive covenants, planning enforcement notices, rights of way, subsidence or contamination flags in the environmental search, and whether the property has sitting tenants (which affects your ability to obtain vacant possession).
Arrange finance in advance. If you plan to use bridging, get an agreement in principle from a bridging lender. Know your maximum bid before you enter the room.
Inspect the property. Not all auction lots allow internal viewings, but where they do, attend and note the condition. If you cannot inspect internally, factor a larger contingency into your maximum bid to cover unknown defects.
Guide price vs reserve price
The guide price is an indication of where bidding might start. It is not the seller's minimum. The reserve price is confidential and usually sits within 10% above the guide price. A property with a guide of £80,000 might have a reserve of £85,000 to £90,000.
If the bidding does not reach the reserve, the lot is withdrawn ("not sold"). It may be available for negotiation after the auction.
Costs
| Cost | Typical range |
|---|---|
| Buyer's premium (some auctioneers) | 0% to 2% |
| Reservation fee (modern method) | 3% to 5% |
| Legal pack review (solicitor) | £300 to £500 |
| Bridging arrangement fee | 1% to 2% |
| SDLT | As per standard rates |
Add these to your maximum bid calculation. A lot that looks like a bargain at the hammer price can become expensive once fees, SDLT, and finance costs are included.
Sources
- Essential Information Group, UK property auction data. https://www.eigpropertyauctions.co.uk/ [Accessed 6 May 2026]