What actually happens when the hammer falls?
In an ordinary purchase, weeks of investigation sit between the offer and the moment you are bound. At a room auction that moment arrives with the hammer. A contract for the sale of land normally has to be in writing and signed by both parties under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, but section 2(5)(b) exempts a contract made in the course of a public auction, which is why the bid and the auctioneer's acceptance of it are enough to bind you. Whether that exemption reaches an online timed sale is a good deal less settled, so read the platform's terms rather than assume it.
From that moment you are the buyer under a contract on the auctioneer's conditions. The deposit is the greater of a tenth of the price excluding VAT and any minimum the auctioneer has stated, so on a cheap lot the minimum is what bites, and it is payable at the time the auctioneer's conditions require, which in the room is on the day. The Common Auction Conditions (5th edition, July 2024, checked 20 September 2026) impose no buyer's administration fee or premium of their own and bar any payment that is not specifically stated, but they allow one where the special conditions or the auctioneer's own conduct conditions set it out, so read both before you bid. Completion is on the date the special conditions fix, commonly 20 business days or 28 days after the auction, and sometimes fewer. Risk in the property passes to you on exchange, so buildings insurance must start the same day.
There is no cooling-off period, no subject-to-survey, no subject-to-mortgage. If you do not complete on the date, interest runs under the conditions, the seller can serve a notice to complete, which under the Common Auction Conditions runs for ten business days, and if you still do not complete the deposit is forfeited and the seller can claim for any further loss, including a shortfall on resale. Our exchange of contracts guide explains what being bound means; at auction it means it from the first minute.
What is in the legal pack and how do you read it?
The auctioneer publishes a legal pack for each lot, prepared by the seller's conveyancer. It is the whole of your pre-contract investigation, and anything it does not answer is a risk you take on knowingly. The pack is often added to right up to the day of the sale; an addendum read out in the room or posted online forms part of the contract, so the review has to be repeated on the day.
| Document | What to check | Red flag |
|---|---|---|
| Special conditions of sale | Completion date, deposit, interest rate, any costs shifted to the buyer | Buyer to pay the seller's legal fees, arrears, or the auctioneer's commission; completion in under 20 days |
| Title register and plan | Class of title, restrictions, charges, covenants, rights of way, whether the plan matches what is being sold | Possessory title, an undischarged charge, a restriction needing a third party's consent |
| Searches | Whether local authority, drainage and environmental searches are included and how old they are | No searches, or searches more than six months old |
| Property information and fittings forms | Disputes, notices, alterations, boundaries | Forms not completed at all, which is common with repossessions and executors |
| Leases and tenancies | Whether the property is sold with vacant possession or subject to occupiers, and on what terms | A tenancy at a low rent, an occupier with no written agreement, a short residential lease |
| Planning and building regulations | Permissions and completion certificates for extensions and conversions | Works with no paperwork; an enforcement notice on the local search |
| Replies to enquiries | Answers the seller's conveyancer has given to earlier bidders' questions | A pattern of "not known" or "the buyer must rely on their own inspection" |
| Energy Performance Certificate | Rating and validity | Missing. There is no auction exemption: under regulation 7(2) of the Energy Performance of Buildings (England and Wales) Regulations 2012 the seller must commission one before the lot is put on the market, and regulation 6(2) requires it to be made available free to a prospective buyer no later than the first written information or the first viewing |
What must be in place before you bid?
Four things: a legal review of the pack, a survey, certain finance and your identity documents. The legal review is not a skim. A conveyancer reads the title, the special conditions and every document in the pack, raises any enquiries the seller's conveyancer will answer before the sale, and tells you in writing what you would be buying and what it would cost to put right. Our auction service does this on a fixed fee per lot, and the report is the document you bid on.
A survey before bidding is far cheaper than discovering a structural problem after the hammer falls. Access is usually available at block viewings, and a surveyor can often attend one. Auction stock is disproportionately made up of properties with problems, because the problems are what brought them to auction. The pack will not tell you about the roof.
Budget for everything, not just the price. Stamp Duty Land Tax in England or Land Transaction Tax in Wales falls on the purchase in the usual way, and the higher rates apply if it is an additional property. Our stamp duty basics guide covers both. Add the buyer's fee, any costs the special conditions shift to you, the HM Land Registry fee set by the fee order, insurance from the day of the sale, and the cost of the works the survey has found.
Register with the auctioneer in advance. You will need to prove your identity and the source of your deposit under the money laundering rules, and the auctioneer will not accept a bid from an unregistered bidder. Our ID and AML checks service handles the conveyancing side of that.
How does finance work for an auction purchase?
Finance has to be certain, not likely. A 28-day completion is shorter than most mortgage lenders can manage from application to offer, and a property that is unmortgageable, because of a very short lease, no working kitchen or bathroom, structural defects or an unusual construction, will not be lent on at all. Cash, or bridging finance already agreed in principle with a clear exit into a longer-term mortgage or a resale, is what makes an auction purchase realistic for most buyers.
If you intend to use a mortgage, the application, valuation and offer must be complete before the auction, with the lender told that the property is being bought at auction and completion is fixed. An offer subject to conditions you cannot meet in the time is no offer. The lender's requirements in the UK Finance Mortgage Lenders' Handbook still apply.
If you cannot complete on time you owe contractual interest from the completion date, at the rate the conditions specify, and the seller can serve a notice to complete. Once that expires the seller can rescind, keep your deposit and sue for the difference on a resale. The conditions do not make allowances for a lender running late.
How is the modern method of auction different?
Online "modern method" or conditional auctions work differently. The winning bid does not create a contract. Instead the buyer pays a non-refundable reservation fee and is given a reservation period, often 56 days, to exchange and complete.
The timetable is gentler and a mortgage is more often possible, but the fee is real money at risk. It is usually paid on top of the price rather than as part of it, it is lost if you fail to exchange for any reason, and because it is a cost of acquiring the property it may count towards the chargeable consideration for Stamp Duty Land Tax or Land Transaction Tax. The seller can also, in most schemes, still withdraw. Read the reservation terms as carefully as any traditional special condition, and read the legal pack in the same way, because you are still committing to a price before the usual investigation.
What happens between the hammer and completion?
The conveyancing that normally takes weeks has to fit into the completion period, which is why the pack review before the sale matters: on the day after the auction your conveyancer already knows the title, the searches and the problems. What remains is the mechanics. The transfer deed, form TR1, is prepared and approved. Pre-completion searches at HM Land Registry are made to check nothing has been registered since the pack. The balance of the price, the tax and the fees are gathered into your conveyancer's client account in cleared funds before the completion date, not on it.
On completion the money is sent, the keys are released and your conveyancer files the Stamp Duty Land Tax or Land Transaction Tax return and pays the tax within the statutory window, then applies to HM Land Registry to register you as owner and to register any charge. If the property is tenanted, the tenants are told to pay rent to you.