FTB considering buying at auction.. help!

mrak

I'm a young professional working in the city on a basic salary of £28k and with £12k in savings (and about 10k student debt!). I've seen an auction property with a guide price of about £100,000 that looks right up my street, but what I'd like to know is:

* Is my salary adequate to cover a purchase of this magnitude? I may be able to borrow a few quid off my folks, but not much. :P
* Do properties typically outstrip the "auction guide price" by leaps and bounds?
(similarly sized properties in the area sell for closer to 150k)
* When considering a purchase such as this, what do I need to consider besides ground rent, auctioneers fees, lease length, council tax costs, etc?
* Is 99 years much of a lease? When do leases officially become too short to be of any real value? 50 years?

Now, the auction is the end of the month, so if I want to seriously persue this, I'm going to need some sound advice and to work very quickly indeed!

Can it be done? Thanks in advance for your help!!!!

Doozergirl

At 3.5x salary, you'd be able to borrow £98,000.

The reserve will be set either at guide price or a bit higher. It will depend on the property as to whether it goes over. If the property is in good condition, it is likely to go for far nearer to it's potential value.

Your main consideration should be the condition of the structure of the property and whether your mortgage will be approved; roof, walls, windows, electrics, plumbing. if you can't get a mortgage, you've got problems. You exchange contracts immediately after the auction,this means you're obliged to complete the sale. If you can't, you lose your 10% deposit.

99 years is the shortest lease you eill come across. When did the lease start? Under 80 years starts to be problematic for resale until you renew the lease. 70 years or under will limit the number of lenders available to you. Avoid.

Have you been to see this property at all? Have you viewed many properties at all? Really for auction, you need to have someone you trust that knows buildings very well, otherwise you will need to get a survey carried out at your own cost with no guarantee of success.

Thefunkygibbons

Certainly recent press reports have suggested that the guide prices at many auctions are set woefully low

Which is time wasting for everyone involved

You are best going to several auctions to get the feel for them so it probably means that this first property will get away from you

mrak

Sensible advice. Thanks! It's too tight a turnaround time to really source that kind of money in a week.. Any additional comments would be appreciated tho.

mrak

lynzpower

Incidentally, most mortgages do not apply to properties bought at auction. Check yours does (if you have an agreement in principle) with your broker