As the festive season rolls in, the property market usually quiets down from the second week of December. Most are focused on the holidays, leaving room for keen buyers to snag a bargain. While the open market offers some opportunities, property auctions during this time could be an even more lucrative avenue for those seeking significantly lower prices.
Upcoming Big Auctions – A Wealth of Choices
Two major auctions are imminent: Allsop and Savills Auctions. Allsop is presenting 225 lots on Thursday, 14 December, followed by 165 more on Tuesday, 19 December. Savills Auctions is also holding its final sale of 2023, featuring over 220 lots across the UK, spanning residential, commercial, and development properties. The offerings cater to all budgets, ranging from a £1.95 million grade II listed property in Chelsea to a modest £15,000 three-bedroom house in County Durham.
Insights from Savills Auctions
Robin Howeson, head of Savills Auctions, highlights the potential of December auctions. With over £100 million in property sales in November, indicating no pre-Christmas slowdown, December presents a promising opportunity for buyers. The recent uptick in auction activity further enhances the prospects of finding a bargain.
Last-Minute Entry into December Auctions
The Clock is Ticking – Rapid Preparation Required
With only four weeks between the auction catalogue publication and the auction itself, potential buyers must act swiftly. Though viewing the property in advance is ideal, some may have to bid without an inside look—a risk that can still be worth taking.
Registration and Legal Considerations
To bid, either online or in person, registration is a must, involving personal details, identification, and solicitor’s information. It’s advisable to have a solicitor review the legal documentation available on the auctioneer’s website beforehand. These legal packs provide a summary of each lot’s pros and cons, often including searches, or a solicitor can apply for these before the auction.
Pre-Auction Strategies
For those needing a mortgage, arranging this in advance is crucial, as not all banks offer mortgages for auction purchases. Auctioneers can recommend mortgage brokers or development finance specialists if needed.
Understanding Auction Mechanics
Guide and Reserve Prices
Properties at auctions have a guide price to indicate the budget range. Bidding may start below this price. There’s also a reserve price, usually up to 10% higher than the guide, not disclosed to bidders. This is the minimum price set by the seller.
The Auction Day Dynamics
Once a bid is accepted, it becomes binding immediately. The buyer must complete a memorandum of sale and provide a 10% deposit, typically on the same day. The completion of the sale occurs between two and six weeks later.
Bidding Options and Advantages
Bidders can participate online, over the phone, or via proxy bids. Savills Auctions, for example, live-streams auctions online for a fair bidding environment. Auctions offer the advantage of quick buying and selling, with a high success rate—Strettons, for example, has an 85% success rate over the past year.
A Promising Start to the New Year
Purchasing in a December auction can mean having the keys by January. The auction process eliminates the risks of counter offers, gazumping, or long chains, and depends on the buyer’s due diligence and price willingness.
Pre-Auction Checklist
- Research: Look into properties and auctioneers.
- Viewings: Arrange them and ask questions.
- Auction Particulars: Obtain a copy.
- Act Fast: Be ready for quick decisions.
- Stay Informed: Request updates.
- Budgeting: Set a clear budget.
- Read the Fine Print: Check all details.
In conclusion, December’s property auctions offer a unique chance for investors and homebuyers to find valuable deals. With the right preparation and understanding of auction dynamics, one can end the year with a lucrative investment or a new home.