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Warning issued as more first-time buyers consider buying at auction to beat stamp duty deadline

ended 31. January 2025

With the stamp duty changes looming ever closer, one property conveyancer, Chris Barry of Thomas Legal, says he has seen a rise in the number of first-time buyers considering buying at auction to beat the deadline. But he warns: “First-time buyers need to tread very carefully at auction."

Patricia McGirr, Founder at Repossession Rescue Network, also warned first-time buyers to tread very carefully: “Auctions can turn a stamp duty saving into a financial disaster if you get caught in a bidding war. With the stamp duty deadline looming, more buyers are gambling on auctions to beat the clock but the adrenaline rush can be costly. Know your limit, stick to it and do your due diligence before you raise that paddle. Or you could be up the creek without one.”

Michelle Lawson, Director at Lawson Financial, also sounded a note of caution: “TV programmes often show the success stories of buying at auction but rarely the disasters. Any first-time buyers considering the auction route could see any savings on stamp duty wiped out by the work needed. Buyer beware.”

Mortgage broker, Justin Moy, of EHF Mortgages, agreed: “Homes under the Hammer makes it look a lot easier than it really is. Inexperienced buyers at auction could find themselves under the hammer.”

7 responses from the Newspage community

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Chris Barry
Director at Thomas Legal
The rush to save as much as £11,250 before the stamp duty changes in April is still on. First-time buyers are now attempting more creative ways to get purchases over the line and we are seeing auction property enquiries rise as a result. With the average transaction time taking five months, those just finding out about the SDLT saving are now considering auction purchases as a way to beat the system. Auction properties typically have a 28-day completion deadline once a successful bid has been registered so on the face of it seems like a solution. However, it’s not without its risks. We typically advise clients that properties being sold using the auction method are quite often a result of serious issues. We charge to review an auction pack for a client ahead of the auction and our advice may be to not purchase the property. Auction properties are usually better suited to seasoned investors and cash buyers to mitigate the risks. First-time buyers need to tread very carefully at auction.
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Clive Read
Owner at Goldmanread
We often get calls from first-time buyers asking whether they should buy at auction. Generally we advise against this. There's usually a reason why a property is being sold quickly (and at a potentially lower price) in an auction . This may be due to structural problems, lease length or other planning issues that may effect the saleability of the property. Auctions are "efficient" markets which mean you may not be always getting a bargain, especially if you factor in renovations costs. Generally when buying at auction you will be up against experienced investors who know their market well. This will put first-time buyers at a disadvantage and means they may risk overpaying for a property or ultimately ending up with something that is unmortgageable.
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Patricia McGirr
Founder at Repossession Rescue Network
Auctions can turn a stamp duty saving into a financial disaster if you get caught in a bidding war. With the stamp duty deadline looming, more buyers are gambling on auctions to beat the clock but the adrenaline rush can be costly. It’s easy to overbid in the heat of the moment, stretching beyond budget and facing a legal commitment you can’t back out of. We’re seeing more first-time buyers take the plunge but many underestimate the risks. Hidden defects, financing pitfalls, and unexpected costs can wipe out any stamp duty saving. Auctions reward the prepared, not the impulsive. Know your limit, stick to it and do your due diligence before you raise that paddle. Or you could be up the creek without one.
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Michelle Lawson
Director at Lawson Financial
TV programmes often show the success stories of buying at auction but rarely the disasters. Auction properties are there for a reason and rarely without problems. The trick is having the knowledge and experience to find the issues before you potentially buy an unsaleable money pit and lose your hard-earned cash. Take time to learn, attend some auctions first, engage with a good experienced and knowledgable broker and then you are part way there. You need to be ultra vigilant and avoid buying a dud unless of course you want specifically this and have what it takes to see it through warts and all. Any first-time buyers considering the auction route could see any savings on stamp duty wiped out by the work needed. Buyer beware.
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Justin Moy
Managing Director at EHF Mortgages
Buying at auction is not the perfect place for a first-time buyer to find their first home. Typically, property sold at auction needs development or may not be in a condition to mortgage straight away, so any potential savings on stamp duty will be easily lost in extra costs and expenses. Cash buyers, landlords and developers are more attuned to this market. Homes under the Hammer makes it look a lot easier than it really is. Inexperienced buyers at auction could find themselves under the hammer.
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Simon Bridgland
Broker at Charwin Private Clients
For the cash rich and experienced buyer or developer, you can pick up a bargain if you play it right, but for the average first-time buyer or those with virtually no experience of property development, it’s like a learner driver hopping into an F1 car to pop to the shops. Disaster and some serious financial pain potentially lie in the road ahead.
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Ben Perks
Managing Director at Orchard Financial Advisers
Auction properties come with baggage. So use this Stamp Duty saving hack at your peril. I’d advise first-time buyers not to buy via auction.
Auction purchases are a great buy for an experienced and financially free buyer. But for first-time buyers, it’s better to take the hit on stamp than open up a can of worms.