With the stamp duty deadline fast approaching, industry figures are warning that a growing number of first-time buyers are turning to property auctions in a bid to complete their purchases before changes take effect.

However, legal and financial professionals talking to Newspage have cautioned that auctions carry significant risks for inexperienced buyers, potentially erasing any savings on stamp duty with unexpected costs and complications.

HIDDEN RISKS

Chris Barry, director at Thomas Legal, has observed a marked increase in enquiries from first-time buyers considering auction properties. He warns that while auction purchases offer the advantage of a rapid 28-day completion, they often come with hidden risks.

“The rush to save as much as £11,250 before the stamp duty changes in April is still on. First-time buyers are now exploring more creative ways to get transactions over the line, and we have seen a rise in auction property enquiries as a result. However, properties sold at auction often come with serious issues that may not be immediately obvious,” Barry said.

“We always advise clients to have an auction pack reviewed before bidding. In some cases, our recommendation is simply not to proceed. Auction properties are generally better suited to experienced investors and cash buyers who can absorb potential risks. First-time buyers need to tread very carefully.”

TV NOT REALISTIC

Michelle Lawson, director at Lawson Financial, also urged caution, noting that television programmes often paint an overly simplistic picture of auction purchases.

“TV shows highlight the success stories but rarely the disasters,” she said. “Auction properties are usually there for a reason, often with issues that require significant expertise to identify and resolve. First-time buyers must take time to learn the process, attend auctions without bidding, and work with an experienced broker before jumping in. Without due diligence, they risk turning a potential stamp duty saving into a financial disaster.”

NOT FOR FIRST-TIME BUYERS

Justin Moy, managing director at EHF Mortgages, reinforced these concerns, pointing out that many auction properties require substantial renovation, making them unsuitable for buyers relying on standard mortgage finance.

“Buying at auction is rarely the right move for a first-time buyer looking for their first home,” he said. “Many auction properties require work before they can be mortgaged, meaning buyers could face significant costs before securing the financing they need. Any potential stamp duty savings could quickly be swallowed up by unforeseen expenses.”

PITFALLS

Simon Bridgland, director at Release Freedom, likened the risks of buying at auction without experience to “a learner driver hopping into an F1 car to pop to the shops.”

“For cash-rich and experienced buyers, auctions can offer bargains,” he said. “But for a first-time buyer with little or no knowledge of property development, the road ahead could be filled with financial pitfalls.”

BIDDING WAR RISKS

Patricia McGirr, founder at Repossession Rescue Network, warned that bidding wars could quickly turn an apparent bargain into an expensive mistake.

“With the deadline looming, more buyers are gambling on auctions to beat the clock, but the adrenaline rush can be costly,” she said. “It’s easy to get caught up in the heat of the moment, bid beyond your budget, and commit to a purchase you later regret. Auctions reward the prepared, not the impulsive. Buyers must do their due diligence, set a firm limit, and stick to it.”

As the stamp duty changes approach, experts agree that while auctions may offer a quick route to completion, first-time buyers should proceed with extreme caution, ensuring they fully understand the risks before raising their paddle.