Property auctions are one of the few areas of the economy that have enjoyed growth in 2020.

Savills says the value of property it has sold at property auctions this year is almost 40% higher than the same period in 2019, while other auction houses have recorded record sales in recent months. By way of example, auctioneer John Pye Property said the value of auction properties sold between May and October was 126% more than the same period last year, and the number of bidders increased by 52%.

The level of growth this year has been unusually strong, continuing the upward  rise in popularity for property auctions in recent years. According to figures from Essential Information Group, the number of auction sales grew by 20% in 2019, and the value grew by around 20%.

Property Auction popularity is on the increase

It’s the rapidly increasing popularity of auctions in recent months, however, that has really caught the eye. One of the big advantages for purchasers buying at auction at the moment is the pace of the transaction providing sellers with certainty of capital within a short timescale. Also, with completion usually required within 28 days, buyers can almost guarantee that they will successfully beat the deadline for the SDLT holiday.

Another factor has been the rise of online auctions. These were introduced by auction houses out of necessity in March and have actually succeeded in making buying a property at auction much more accessible to a much wider group of people.

Buying at auction can be lucrative – securing a bargain

Buying property at auction can prove lucrative for property investors and prove a way for homebuyers to secure a bargain.

It’s not unusual for properties sold at auction to require some refurbishment and this is a good way for buyers to add value. However, the rising popularity of buying property at auction has come at a time when many bridging lenders are taking longer to progress applications to completion. One piece of industry research recently said that the average time for completion of a bridging loan is now more than 50 days. This is not the case for every application, or indeed, every lender, but it’s a worrying statistic for buyers purchasing at auction who may need to complete in just 28 days. So, what’s the alternative?

One way of enabling property investors to buy with more confidence at auction is with a funding facility that can be quickly drawn down and then repaid on multiple occasions whenever it is needed. This can provide them with liquidity on tap so that they can bid with confidence and not worry about delays getting in the way of their auction purchase.

The Alternative Overdraft – helps avoid delays and setting up charges

At Alternative Bridging Corporation, we offer the Alternative Overdraft, which can be secured by a first or second charge on a commercial or residential property, and avoids delays and expensive setting up charges each time a loan is needed.

Buying a property at auction is becoming more popular for property investors, and you need to be ready to help them finance these purchases. If you are concerned about delays getting in the way, think about taking an alternative approach.

Click here to read the full article on Bridging Loan Directory now.