Yahoo Finance Buying a house at auction could cost you 40% less
Buying a house at auction could cost you about 40% less than purchasing through traditional methods, research suggests.
Houses bought at auction in the UK in 2020 are about 40% cheaper than the average cost of a home, according to bridging loans broker Octagon Capital.
Combining data on houses bought at auction in 2020 and ONS data, houses sold for about £138,240 at auction in 2020 — just two fifths the average price of other methods, which stands at £231,885.
READ MORE: Coronavirus — Banks set to extend mortgage holidays for hardest-hit homeowners
Those in the north-east could save even more. Houses bought at auction in County Durham, Tyne and Wear, Cleveland and Northampton are just a quarter (24%) the price of those bought through other methods.
Meanwhile, those in Lincolnshire could see savings of about 73%, and house-hunters in Scotland could save about 72%.
At the other end of the scale, those in Leicestershire make the smallest savings by buying at auction, with prices tending to be more aligned with the average for the county.
However, house-hunters in this area still saved about a fifth (19%) so far in 2020, the data shows.
“Whether you’re fixing up a house to sell-on, or looking for a bargain for your perfect home, our analyses shows that buying houses at auction is a great way to hunt down a financially astute deal,” said Dan Kettle, commercial director at Octagon Capital.
READ MORE: Coronavirus — UK government will extend eviction ban amid homelessness fears
However, buying a home through auction is not for the faint-hearted. Once the gavel hits, you have a legal obligation to go ahead with the purchase, Octagon noted.
This means paying a 10% deposit on the day, with a further 28 days to provide the outstanding balance.
