How to Budget for an Auction Purchase
Budget Beyond the Winning Bid
The purchase price is only one part of the cost.
Before bidding on an HMO at auction, allow for:
- The deposit payable immediately after the auction
- The remaining purchase funds due by the completion deadline
- Stamp Duty Land Tax or the relevant property tax
- Auction administration fees and buyer’s premiums
- Solicitor, valuation and lender fees
- Bridging interest and arrangement fees
- Refurbishment, conversion and licensing costs
- Insurance, utilities and council tax during the works
- A contingency fund for unexpected issues
You should also calculate the net loan proceeds, as retained interest and lender fees may reduce the amount available on completion.
Set your maximum bid using the full project cost—not just the guide price. That helps protect your deposit, your completion deadline and the viability of the HMO project.
