Who Bids at House Auctions?

There was a time when property auctions were just for an elite member of society, the professional property developer with a large portfolio of properties already under their belt. They were not often heard about and those that attended them were experienced developers who knew of these auctions through their business and their work circles. You would often struggle to find out where an auction was taking place and may not ever come across one! However all that changed thanks in no small part to the media.

The Rise in Property Developers

All of a sudden there was a boom in the number of television programmes about homes and buying, selling and redeveloping properties. Daytime television was and still is dominated by programmes about doing up old properties, moving up the property ladder and making a fortune out of buying and selling properties. This sort of aspirational television made some people think they could make a career out of the property market. Indeed many did. A large number of people quite their jobs and become full time property investors and developers and this was because the TV shows made it look easy. For many it paid off, for some it didn’t but there are still many people who see it as a viable career choice in the future.

The TV shows talked of property auctions where potential buyers could snap up real bargains at a fraction of the price they would normally sell for. Many houses were in need of repair but there were TV programmes about that too and sometimes buying a cheap property and doing it up could give the owner a hefty profit when it came to selling it on.

The Housing Market

The booming housing market also encouraged people to become property investors. House prices were rising year on year and it seemed like the easy way to make a quick buck. If prices rocketed over the course of a year the owner could make a fortune in just twelve months.

Repossessions

Rising repossessions also encouraged ordinary people to visit auctions were they could buy a repossessed property at a bargain price. Repossessions are still steadily rising and lenders who have to repossess a property want to get rid of it very quickly meaning they are likely to offer a hefty discount.

Property auctions went from being a place where just experienced investors went, to a place where ordinary members of the public with the ambition to get on the property bandwagon would show up.

However the market is changing. House prices are falling and getting a mortgage is becoming more difficult due to the credit crunch and lack of liquidity in the market. It is likely therefore that less people will want to get involved in property developing and investing in the near future at least. For those that do though there is the chance to snap up plenty of bargains as unfortunately repossessions are even higher than before thanks to the problems in the economy.