Conveyancing on a house bought at auction.

GDB2222

Hmmmmm. Let's make the assumption that house prices will generally fall by say 25% over the next two years, so say 40% from the peak 2007 prices.

First does the new place you are looking at meet the following criterion?

Price now at auction = (60% of price at peak of market),
less cost of works needed (including notional cost of finance whilst the work is being done and carpets/curtains which are usually included in a sale),
less say 10% to compensate you for your trouble,
less say 10% to allow for the discount you'd expect at auction anyway.

If, as I suspect, that equation is not being met, then the auction prices are not reflecting the future drop, but just the drop that has already taken place. Auction prices are normally below the usual market prices by say 10%, but there is no particular reason to believe that the auction market is discounting future falls.

Second, if you are planning to sell the bigger place, isn't this new place just a distraction? You might be losing 25% on the bigger place, whilst doing all sorts of clever stuff at the new place and losing 25% on that too. The new place is almost an excuse not to take the reduction in price needed to sell the bigger place, but that reduction is just getting bigger all the time. (Sorry, I'm not trying to psychoanalyse you.)

GDB2222

BTW, dilapidated properties needing major work are usually bought by builders, who can do the work relatively cheaply.