Can First-Time Buyers Buy at Auction?

First-time buyers can buy property at auction. But is buying your first home at auction a sensible move? Previously, this method of buying a first home was never as popular as buying through estate agents, but auctions are now growing in popularity for first-time buyers.

In this guide, Auction House London explains everything first-time buyers need to know; from the benefits and risks, to the step-by-step process, including how to finance your purchase with a first-time buyer mortgage for auction property.

Can First Time Buyers Buy at Auction?

Yes, first-time buyers can buy property at auction. In fact, auctions can be a very beneficial route to purchasing your first home or investment, but there are steps to follow and some potential pitfalls to consider. 

Why Should a First-Time Buyer Buy at Auction?

Buying your first home at auction might sound daunting, but it can actually offer some major advantages over traditional routes. From cost savings to a faster buying process, auctions can be a great option for first-time buyers ready to make their move.

What are the Benefits of Buying Property at Auction for First-Time Buyers? 

One of the biggest benefits to first-time buyers buying property at auction is the money they can save, especially if they are prepared to do some DIY that adds value to the property after they have bought it. But saving money is just one advantage – here are more key benefits to consider:

• Money Saving
  Auction properties are often priced to sell quickly, which gives first-time buyers the chance to secure a property at a lower price than they might find on the open market. If the property needs work, renovation properties for sale can offer even more of a saving. Renovating gives first-time buyers a fantastic opportunity to build equity from day one.
• Faster Buying Process
  Unlike property purchases through estate agents, auction sales – especially through property auctioneers like Auction House London – have fixed dates for bidding and completion, which means no long chains or lengthy negotiations. This is ideal for first-time buyers who want to move quickly.
• Transparency in the Bidding Process
  The eBay-style auction format is open and public, so all buyers can see what others are bidding. This avoids the uncertainty that sometimes comes with estate agents’ properties, and means all buyers can stick to their all-important set budgets.
• Less Competition from Buy-to-Let Investors
  Some property auctions include properties which may not appeal to investors due to restrictions (such as owner-occupier only covenants), which means better opportunities for residential first-time buyers.

Pitfalls and Risks of Buying at Auction as a First-Time Buyer

Whilst buying at auction is a faster and typically more straightforward way to purchase property for first-time buyers, you also need to be fully prepared before bidding.

Once the gavel falls, the sale is legally binding, meaning there is no going back. Here are a few potential pitfalls to be aware of, and Auction House London’s expert advice on how to avoid them:

• Underestimating the real cost
  Securing the winning bid is undoubtedly exciting, but you will likely need to pay a deposit immediately, plus cover auction fees, legal costs and possible renovation work.
  Auction House London’s expert tip: First-time buyers should set a realistic budget before the auction – and stick to it. Plus, get quotes for any required work beforehand. Do not forget to factor in Stamp Duty and survey fees.

• Mortgage finance falling through
  Unlike traditional property purchases, auction sales often require completion within a matter of days, which can raise problems if your mortgage is not finalised in time.
  Auction House London’s expert tip: Have your mortgage in principle ready before bidding.
• Not doing enough due diligence
  It is easy to fall into the trap of falling in love with the idea of a property at a bargain price, and skipping key checks before bidding. However, any issues that are not immediately obvious, like structural problems such as Japanese knotweed or legal complications like lis pendens can be costly in the long-run.
  Auction House London’s expert tip: Always read the legal pack thoroughly, get a solicitor to review it, and arrange a survey before the online auction day if you can.

Step-by-Step Guide: How First-Time Buyers Can Purchase at Auction

Buying a property at an auction can be very beneficial for first-time buyers, often offering opportunities to secure a home below market value. However, the process is fast-paced and can feel overwhelming if you are unprepared. Here is a clear step-by-step guide to help you navigate your first auction successfully, compiled by Auction House London’s expert team.

• Step 1: Getting your finances in order
  If you need a mortgage, like most first-time buyers do, it is sensible to start arranging this as soon as possible. This will help you to set your realistic budget, and to bid with confidence knowing that you have the funds needed and to get things moving quickly if you do make the winning bid.It is worth noting that not all lenders will finance auction purchases, so make sure yours does. Speak to a financial advisor or specialist mortgage advisor if you need to, as having the right lender is key.

• Step 2: Understand the auction process
  Before bidding, familiarise yourself with the auction process. We suggest that you attend an auction to see how it works first. It is worth taking the time to understand common jargon before you head into an auction too, like:

• • Legal pack
  • Guide price vs. Reserve price
  • Exchange on the fall of the hammer
    
    You can read more in our guide to buying at auction.

• Step 3: Set your budget – and stick to it

Work with an advisor to establish your maximum budget, including the likes of:

• • Purchase price
  • Stamp Duty
  • Legal fees
  • Survey and valuation costs
  • Renovation costs (if needed)

Be strict with your bidding limit when it comes to auction day. It is easy to get swept up in the moment.

• Step 4: Research the property

Before bidding, remember to:

• Read the legal pack (which includes title, searches and special conditions)
• Get a survey or valuation done if time allows
• Check planning permission or leasehold terms if relevant

Auction House London’s expert tip: If possible, hire a solicitor to review the legal pack before auction day.

• Step 5: Prepare to bid

Make sure you have everything you need before the auction. You will need to remember to register with the auction house, sometimes days in advance. You will also need to have any required documentation to hand, and your deposit expectations.

View our latest properties for auction.

Common Mistakes to Avoid Making as First-Time Buyers at Auction 

Even the most savvy property buyers can slip up, so here are some of the most common mistakes Auction House London have seen in their experience, and their expert tips on how to avoid them.

• Skipping or skim reading the legal pack
  Where possible, it is best to have a solicitor review the legal documents before bidding to avoid hidden issues or costs. Or, at very least, read your documents thoroughly yourself and go through them with a fine tooth comb.
  

• Bidding without finance already in place
  Securing a mortgage in principle or having funds ready is key, as you will need to complete quickly – usually within just a few weeks.
  

• Letting your emotions take over
  Set a firm budget and stick to it, even if the bidding gets competitive. Be willing to let the property go, if bidding goes beyond your budget.
  

• Underestimating the total cost (not just the hammer price)
  Factor in stamp duty, legal fees, surveys and potential renovation costs before you bid.
  

• Not viewing the property
  If possible, visit the property you are interested in in person, or even better, send a surveyor to avoid costly surprises down the line, like structural problems.

If you are a first-time looking to buy a property and are not yet sure which route to go down, you could consider an online property auction. Take a look through our advice centre for tips and advice from our experts, or why not watch a live auction on one of our future auction dates to familiarise yourself with the process before deciding? If you have any questions, make sure to contact our friendly team who will be happy to help. 

First-Time Buyer Via Auction FAQs

Can you get a mortgage to buy at auction as a first-time buyer?

Yes, you can get a first-time buyer mortgage for auction property, but it is important to remember that not all lenders offer them, and the timeline is much tighter than with standard property purchases. It is important to secure a mortgage in principle before the auction, as you will typically need to complete the purchase quicker than you would via other property buying routes.

Can I use a Help to Buy scheme at auction?

Generally no – schemes like the Help to Buy: Equity Loan were typically only available for new build homes and have specific eligibility rules and price caps. Auction properties are usually not eligible. 

Do I need a solicitor before buying at auction as a first-time buyer?

Yes, we would recommend instructing a solicitor or conveyancer before you bid so that they can review the legal pack, check title, searches, any special conditions and help you understand any risks or additional costs.

Can first-time buyers buy repossessed property at auction?

Yes, repossessed properties are sometimes sold via auction, and first‑time buyers can bid on them. However, repossessed lots may come with extra risks: possible title issues, structural problems, outstanding charges or necessary repair work, meaning they are not typically the best option for first-time buyers.