How do property auctions work in the UK? (Before You Bid)

Buying a house at auction can feel like a mystery, so let's clear it up. And here's the one big difference. In a normal house sale, you agree a price. Then you do your checks, and you only commit weeks later. At auction, the checks come first. Because the moment the hammer falls, you're legally committed to buy. That's the rule that catches people out, and it's why everything in this video is going to show you what happens before you bid.

There are usually five steps. You find a lot, you check it, you set your budget, then you go and compete in the bid, and finally, you buy. Then I'll show you how to check a real lot using Lotwick's website. This video covers England and Wales. And if you're buying in Scotland, we're going to do a video on that later.

Step one, find a lot. Each property in an auction is called a lot. Every lot has a guide price. Think of it as a starting signal, not a price tag. Behind it sits the reserve. That's the lowest price the seller will accept. And you never really get to see it. The reserve can be up to 10% above the guide, so a £90,000 guide could hide a reserve of nearly £99,000. And lots can sell well above or below the guide.

You also need to know what kind of auction it is. At a traditional auction, you're committed when the hammer falls. At a conditional auction, sometimes called a modern method auction, you pay a reservation fee when you win. And in return, you get more time to complete the sale. Some auctions happen in a room, some are streamed, and some are fully online, so you can bid and buy properties directly on your phone. Either way, the type decides when you're committed.

Step two, check the lot. This is where the real information lives. The auctioneer publishes a legal pack, usually a few weeks before the sale. It holds the title, the local searches and the seller's answers about the property, and you want to get a solicitor to read it before you bid, not after. This is what you're looking for in those legal packs. Is it a short lease? Does it have planning issues? Are there any restrictions on the title, or any special conditions in the contract? You're also recommended to view the property if you can. The common traps are short leases, homes a lender won't lend on, sitting tenants, or even structural problems. One more question to ask is: is there an addendum? That's a late change to the sale details. Check for one before you bid.

Step three, set your budget. And here's the catch: the price isn't the price. On top of the winning bid, there's usually a buyer's fee. A buyer's premium is often 1% to 5% plus VAT. There can be an admin fee too. You won't get it back. And then there are legal costs, searches and stamp duty.

Now, the money. If you win at a traditional auction, 10% is due on the day, and the rest is usually due in 28 days. So, can you use a mortgage? Yes, but a mortgage offer can take two to four weeks, so get agreed in principle before you bid. The lender has to be happy with the house, too. If they value it below the price, they will lend less, and you have to cover the gap. That's why some buyers use a bridging loan. It's fast, but it costs more. So work out your maximum with every fee included, and write that down. That's the budget you want to stick to.

Step four is bidding. First, register with the auctioneer before the sale. Then the bidding starts. And when the hammer falls on your bid at a traditional auction, that's it. You've exchanged contracts and it's legally binding. You pay your 10% deposit there and then, and the house is your responsibility from that moment, so insure it straight away. A conditional auction is gentler. You pay a reservation fee, usually 1 to 5%, and you won't get it back. Then you have 28 days to exchange and another 28 days to complete. And if a lot doesn't sell, it can sometimes still be bought straight after the auction, so it's worth asking.

Step five is completion. You pay the rest, usually within 28 days, and the house is yours. So what if you change your mind? At a traditional auction, you can't just walk away. Pull out and you lose your deposit, and you can face further costs too. That's why steps two and three matter so much. Everything you need to know, you need to know before the hammer falls.

So how do you do this in practice? Let me show you how I check a lot on Lotwick. I type a town, like Huddersfield. There are lots of live lots from UK auction houses, with guide prices and auction dates. I'll open this one: a three-bedroom terraced house in Golcar. Step one, the type. This badge says it's a traditional auction, so I'd be committed when the hammer falls. Step two, the checks. This button opens the legal pack. That goes straight to my solicitor. And the key facts tell me something big: this house is Grade II listed, so many changes inside and out need consent from the council. Step three, the budget. Here's the estimated cost to win. I tap the breakdown: the price, the fees and the stamp duty, and I can change it to my maximum bid. And here are the sales on the same street, from the Land Registry. This house itself sold earlier this year, so my question for the auctioneer is: why is it back so soon? Step four: when I'm ready, this button takes me to the auctioneer's website. You always register and bid with them. And if this isn't the one, I can raise a Paddle. That's an alert, so the next lot in your area and budget comes straight to you.

So, let's recap. In a normal sale, you check, then commit later. At auction, you check first, because the hammer means you're committed. So before you bid: read the legal pack with a solicitor, set a budget with every fee in it, get your money ready, 10% on the day, and know what type of auction it is. Do that, and an auction is just another way to buy a home. You can search live UK auctions at lotwick.com. And tell me in the comments: what should I explain next?