A landlord’s guide to property auctions

Looking to expand your rental property portfolio and increase your yields? Purchasing houses at property auctions could be a sensible investment approach. Here is a guide for landlords on property auctions and how they work. 

In 2022-2023, the average sale price at UK property auctions was £190,871, compared to the overall average UK property price in June 2023 of £288,000. With this in mind, it’s not hard to see how purchasing properties at property auctions can be cost-effective.

At CIA Landlords, we are a knowledgeable team of landlord insurance brokers with extensive experience working with all types of landlords, including those who buy investment properties at property auctions. 

Where are property auctions held? 

Property auctions are publicly held at local property auctioneer houses. However, if the property remains unsold in an auction, the auctioneer can be given the authority to sell it privately in the room immediately afterwards. Do your research online to try to find an auction house’s catalogue so that you can find a sale with properties you are interested in. 

How does a property auction sale work?

Time is of the essence when it comes to property auctions. There tends to be only a few weeks between the auction catalogue’s release and the live auction. Properties are listed online to peak potential buyer’s interests before the day of the auction. 

On auction day, the auctioneer will announce the prices. Bidders then call out their bids until no one is willing to bid higher. The winning bid is the highest final bid accepted by the auctioneer.  

Can you get a mortgage on an auction property?

Yes, you can take out a mortgage on a property you buy at auction, although it will often need to be in good condition for a lender to accept your mortgage application. Nevertheless, at property auctions, most homes are bought with cash. 

Do you pay stamp duty on auction properties? 

Yes, landlords buying properties at auction are liable to pay Stamp Duty to HMRC within 30 days of the property sale completion date. At the auction house, you will also usually be required to pay a small ‘buyer’s fee’. 

Buying commercial properties at auction

Commercial properties, whether they be for retail, offices, healthcare or industrial purposes can be more profitable investments for landlords than residential properties. You can buy commercial properties at auction houses as well as residential properties. 

You will need sturdy coverage to protect your commercial property bought at auction, and taking out a commercial landlord insurance policy through us at CIA Landlords could provide you with the protection you’re after.

Looking for a specialist landlord insurance package that covers all your requirements? Give us at CIA Landlords a call on 01788 818 670 or by emailing info@cia-insurance.co.uk.