Will investors now look towards the property auction market?

[Nicholas Wallwork]

Despite many warnings and suggestions that the UK property market is overvalued in some areas it seems that demand for UK real estate continues to rise. Even the ongoing European Union membership issue is having little impact at this moment in time ahead of the referendum later this year. While some investors may be considering

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[nmb]

In reality there has been a shift towards property auctions for some time now where the risks may be greater but the potential rewards are also enhanced. The earlier down the property development chain you invest the greater the risk but the greater the reward. Surely it makes sense for more investors to look towards property auctions?

 

[propertyvalues]

Whichever yard stick one uses, property prices in the UK and many other European countries are overvalued on an historic basis and can be attributed to The government Help to Buy scheme and low interest rates. As for property auctions vs sourcing property offered by agents? Auctions are only as good as the price you end up paying. But auctions do not imply that you pick up property at better than market rates. During a boom, auction properties do not sell for anymore less than retails property prices. However, when a slump takes hold, then there are good deals to be had at auctions. The most important aspect with any property investment decision is to really crunch the numbers; evaluate all risk categories carefully; and understand the downside risks the market faces 3-5 years into the future. Do not base decisions on prices or market sentiment today. Only a fool does that.

 

[nmb]

The property auction market is like any other market, you need to stick to your price, do your research and bid with your head not your heart.

 

[firsttimebuyer]

I have looked at auctions but do not fully understand the risks. Can anyone explain?