1:00 AM 26th January 2024
Homebuyers Could Save As Much As £160k By Heading To Auction
Image by VBlock from Pixabay
The latest research by property finance company, Apex Bridging, reveals that homebuyers could save themselves on average -29% on their property purchase when choosing to buy at auction instead of the open market on similar properties.
The company analysed market data on the guide price of auction properties set to go under the hammer across Britain, how they compare to similar housing stock currently up for sale in the wider market, as well as where the most homes are heading to auction.
“Property auctions can be fast and exciting places, and serve a really valuable purpose within our housing market.
The data reveals that there are currently 20,993 residential properties scheduled to be sold at auction.
The South East of England is home to the largest proportion of these auction homes, with 16% of the national total sitting within the region.
The North West boasts the second highest level of auction properties at 13%, followed by the West Midlands (11%), Yorkshire & Humber (10%), and the North East (10%).
London is home to the smallest proportion of auction homes, with the capital home to just 3% of the national total.
Why would you buy and sell at auction?
With the vast majority of people relying on the open market to find or sell a home, why is it that some choose to go to auction instead?
"But for most people, coming up with hundreds of thousands of pounds in just four weeks can be tricky - that’s where bridging loans come into their own.
For sellers, it’s often a question of speed. Selling on the open market can take months, especially if the property has any issues attached to it. On the other hand, when someone buys an auction property, they are often obliged to have the transaction completed within one month of the hammer falling. This means the seller gets their money quickly.
In exchange for this speed, sellers are often happy to accept a lower price for their property than they would be able to secure on the open market, and that’s why buyers come to the auction - to snap up a great home at a great price.
In Great Britain, the average guide price for an auction home is currently £183,838. This is -29% below the average price of £258,367 for similar sized homes selling in the open market.
The biggest auction discounts are available in the North East where the average guide price is £91,909. This is -33% below the region’s wider average house price of £137,159.
Auction buyers in Wales and the West Midlands can expect to bag a discount of -32% against the average open market price of £205,687.
The smallest auction discount is available in London where guide prices are just -24% below the wider market average. However, due to the capital’s high house prices, this equates to the biggest cash saving at £160,131.
Managing Director of Apex Bridging, Chris Hodgkinson, commented:
Data tables and sources can be viewed online, here.
“Property auctions can be fast and exciting places, and serve a really valuable purpose within our housing market. Sellers who need a quick sale, or have a property with issues that are hampering it on the open market, come together with buyers who are looking to bag a deal.
"As a buyer, there are some risks involved, including the fact that they might need to spend some additional money bringing the property up to a livable standard.
"But when you’re buying at auction, you are required to have the money ready very quickly indeed, often within 30 days. If you’re lucky, you’ll be able to pre-prepare your mortgage application, or if you're even luckier you’ll be paying in cash.
"But for most people, coming up with hundreds of thousands of pounds in just four weeks can be tricky - that’s where bridging loans come into their own. So if you’re looking to snap up an auction bargain but need support in getting the money in place quickly, it’s well worth looking into a bridging loan in order to make your move at speed.”