Land actions and property auctions can be a great place to get a bargain to buy land or property. They are featured on television programmes such as “Homes Under The Hammer”, on newspapers and on our success stories page as more people become aware of property auctions in London and the rest of the country they want to know more.
They can be an ideal place to secure a land or property for the developer, investor and first time buyers just like you. But buying at auction doesn’t work in exactly the same way as buying from an estate agent! To get the best bargain you need to know the process and follow all the rules of the auction.
Here is your Step by Step Guide to Buying a Land or Property at Auction in London.
Homework is key when it comes to finding a property. The first part of the process is to make a decision on what it is you are looking to buy. Buying as a first time buyer would be a very different home to one that a builder might target.
This is important: Decide what you want to begin the process. Once you have an idea of the type of land or property that will suit you then you can start the journey towards becoming a successful developer and investor in London or anywhere in the UK.
Auctions are busy places. When you know the type of property you are looking to target then you need to call and book a place at the auction. Many in London are booked out some time in advance as they are very popular places to buy property.
You will need to book your place as soon as you can to avoid disappointment. Because you know that there will be a lot of competition at the auction now is the time to do all of your research and the hard work. The sooner you are prepared the better.
Property Auctions will have a catalogue that you can browse long before the auction starts. They are often available by post but a more up to date version can be found online at the auction company’s website.
You will need to understand what it is you are looking for with a land or property. Catalogues will have a lot of information there for you to assess each property. Keep a check on the auction company’s website because some lots or properties may be added or withdrawn in the run up to the auction.
When you have been through the catalogue you will want to narrow down a list of hundreds of properties to the few that you will take to the next level. You want to scrutinise the properties available and decide which the ones that might suit your circumstances are.
You will then need to take your time to really look into each of the properties to decide on a shortlist. There are many factors that go into the decision of buying a property at auction in London so look at all the elements that go into that decision. These include but not limited to:
• Guide price
• Any works that need to be carried out
• Potential rental income
• Council Tax bills
• Local Schools
• Public Transportation Accessibility Level
• Local Development Plan of the Council
Whatever the reason you are looking to buy land or property in London at auction, you will need to make sure that the property does all you want it to.
One of the most important parts of this is the building work or extension work that you want to carry out. It is vital here to seek the advice of an architect with regards the feasibility of any works and the planning permissions that you might need. Your architects can give you all the advice you need to make safe informed decisions.
Your architect will also help you produce a report on the property that gives you a full idea of whether the project you are considering will be a reasonable investment or not. Architects deliver this information as a report that shows you all you need to know. They can help you:
• Develop your Project Brief
• Assess the Opportunities & Constraints of the land/building
• Assess the Development Potential of the land/building
• Explore the Design Options
• Formulate your Planning Strategy to win Planning Permission
• Produce your Blueprint Mindmap to articulate Project Vision
• Produce your Preliminary ROI Analysis Report
Here is the kicker: These are hugely important considerations when looking at buying a property at auction in London or indeed the rest of the country. Consult your architect for Architectural Feasibility Report so that you are sure of your investment before you go to auction.
Every property at auction will have a legal pack attached to it that outlines all the conditions of sale as well as any restrictions for the property. This is another really important area to have fully checked out long before the auction date.
The last thing you want is to buy the property and then find that you are restricted when looking to build or extend. Speak to the auction company and get these documents to your solicitor so they can check the potential transaction out for you before you commit to buy.
Buying a property through an estate agent is usually a very sedate affair. You can take your time and make offer months before you complete the sale.
With an auction there are set rules when it comes to buying a property. You usually need to pay 10% of the purchase price on the day and then complete the mortgage transaction within 28 days. If you fail to do this then your deposit is at risk. With the average property price in London currently standing at £488,908 I’m sure that many of us don’t have £48,000 plus to put at risk.
Consult your mortgage adviser as soon as you can in the process. Ideally you want to have an “Agreement in Principle” sorted
When the big day arrives you need to be there in plenty of time and have all your finances, architects work and solicitors advice ready and prepared. Get there nice and early so that you familiarise yourself with the environment and lose any nerves.
For a first-time attendee an auction can be a nerve-wracking experience so soak up the atmosphere and remain calm. Be sure of where your lot is in the bidding so you don’t miss it. The order of the lots will be in the auction catalogue so you can see when you will need to be ready.
All of the work that you have done so far has come to this point. You will need to set a realistic figure and never go above it. You have the power of all the information your architect, solicitor and financial adviser have given you so use these as the guide to how high you can bid.
If you have a “Mortgage agreed in Principle” than this will be an absolute level that you cannot go above because you won’t be sure of the finance. Be sure of what this figure is and bid away. Good luck with this and I hope to see you in step 10!
…you have now bought a property in auction. It is time to turn all of that potential into reality. The work that your architect out in to begin with will now pay dividends as you go back and consult with them to prepare your builders to get the work done.
Remember the feasibility report and all the information that it gave you. This is the time to put all of that into action. Your architect will have given you a blueprint to turn the property you bought at auction into:
• A development project to sell on
• An investment opportunity to rent out
• Your first home
We’ve carried out more than 100+ feasibility studies, and 91% of these have been realised as real projects! No matter what the potential of your site or building, we’ll be able to help.
Buying a land or property in London can be expensive. So looking at auctions in London or the rest of the UK is a good way to buy land or property you need but at a much lower costs. This guide will help you to understand what you need to do and how you can make it a success.
For step by step professional assistance on property development, call us now on 0203 793 78 78 to speak with one our friendly architects.