How do Property Auctions Work in the UK ?
- Holly Hamer
- Oct 17
- 3 min read
Property auctions are becoming an increasingly popular way to buy and sell homes, land, and even commercial buildings. Whether you’re an investor looking for a bargain or a seller seeking a fast and certain sale, auctions can offer an efficient and transparent alternative to the traditional estate agency route.
Here’s a breakdown of how property auctions work, from start to finish.
What Is a Property Auction?
A property auction is a public sale where properties are sold to the highest bidder. Unlike private sales, auctions work on a set timetable, usually with a legal commitment made as soon as the hammer falls.
There are two main types of property auctions in the UK:
Traditional (In-Room or Online) Auctions: The buyer must pay a deposit (usually 10%) and exchange contracts immediately when the auction ends. Completion typically happens within 28 days.
Modern Method of Auction (Online Only): This is more flexible — the winning bidder pays a reservation fee and usually has 56 days to complete. It’s often used by estate agents for residential properties.
Before the Auction: Preparation Is Key
Both buyers and sellers need to prepare carefully before auction day.
For Sellers:
You’ll need to appoint an auction house and provide a legal pack, which includes title deeds, searches, and any relevant planning documents.
The auctioneer will market your property ahead of the sale, often listing it online and in printed catalogues.
You’ll agree a reserve price (the minimum you’re willing to accept) and a guide price (the indicative starting figure advertised to buyers).
For Buyers:
Always read the legal pack in full as it’s essential to know exactly what you’re bidding on.
Arrange finance in advance, as you’ll be legally bound to complete quickly after winning.
It’s also wise to view the property before the auction, or arrange a survey if possible.
How the Auction Works on the Day
On auction day (either in person or online):
The auctioneer will read out key details of each lot (property).
Bidding starts at or near the guide price and rises in set increments.
When the hammer falls, the highest bidder legally commits to the purchase (in traditional auctions).
If you’re successful:
You’ll immediately pay your deposit and sign the memorandum of sale.
The remaining balance is usually due within 28 days.
If the property doesn’t meet the reserve price, it’s marked as “unsold”, though private negotiations often take place after the auction ends.
Costs to Be Aware Of
Both buyers and sellers should be aware of the costs involved:
Buyers:
Deposit (usually 10%)
Auction fees (buyer’s premium or administration fee)
Stamp Duty Land Tax (SDLT)
Legal and survey costs
Sellers:
Auctioneer’s commission (typically 1.5%–2.5% + VAT)
Legal fees for preparing the auction pack
Entry fees or marketing costs charged by the auction house
Advantages and Disadvantages
Benefits for Sellers:
Fast, certain sale (no long chains or fall-throughs)
Competitive bidding can raise the price
Fixed timescale for completion
Benefits for Buyers:
Transparent process — everyone sees what others bid
Opportunity to buy below market value
Quick turnaround
Potential Drawbacks:
Buyers must act fast and have funds ready
No time for lengthy negotiations or mortgage delays
Sellers risk the property not reaching its reserve
The Rise of Online Property Auctions
Online auctions have transformed the market, allowing buyers to bid from anywhere in the UK. Platforms like Auction House, iamsold, and SDL Property Auctions make it easy to participate digitally, offering countdown timers, instant notifications, and transparent bidding histories.
This modern approach is attracting more mainstream buyers and not just investors, due to its convenience and accessibility.
Property auctions can be an excellent route for both buyers and sellers as they offer speed, transparency, and potential savings. However, the key to success is preparation. Whether you’re bidding for your first investment property or selling a home that’s struggled to move on the open market, understanding how auctions work will help you make informed decisions and avoid costly mistakes.
Comments