In the tough financial market at the moment it can be difficult to find a property at an affordable price, and to secure a mortgage on that property. Home owners can’t afford to sell and first time buyers are finding it difficult to get on the property ladder. One option for finding cheaper homes is to find a property at an auction, which is something that has been highlighted on the BBC TV show ‘Homes under the Hammer’.
Home under the Hammer is presented by Martin Roberts and Lucy Alexander, and shows the pitfalls and benefits of buying houses cheaply at auction. The show looks at a house that is due to appear at an auction, one that generally needs a lot of redevelopment or in some cases rebuilding work, and then follows the successfully bidder at the auction.
In many cases the house in questions draws a lot of interest and goes well over its guide price, yet still represents a bargain for the buyer.
Buying homes at auction isn’t for the novice investor, and there are a lot of pitfalls to watch out for, for example the properties often don’t come with planning permission, and purchasers looking to make structural changes can be taking a chance.
However properties bought at auction can represent a good investment for the brave property developer, if you have a mortgage offer in place and the funds to develop.