Without a cash lump sum to buy outright, most people might think property auctions are not for them. But the modern method of auction (MMA) is changing that – as US-born Londoner Rebecca recently discovered.
“We were looking for something close to the sea, away from the London madness and I saw this property come up,” says Rebecca.
Having previously owned in the US before relocating to the UK in 2018, the 41-year-old had been casually scrolling through properties in Thanet, Kent, for a couple of years trying to find her entry point into the UK market when she saw a two-bedroom flat she immediately loved.
“I happened to be down in the area so I was able to walk by it straight away. I loved it, but I saw that it was being sold via modern method of auction and assumed that it was only for cash buyers.
“I was going to have to get a mortgage, and there’s no possible way that I was going to be able to compete with a developer, because the property needed a lot of work.”
As luck would have it, though, Rebecca mentioned the property to a friend she was having drinks with in Ramsgate soon after.
“She told me that she had purchased her house down there through modern method of auction, and her mother had just done it up North somewhere.”
The friend told her straight away: “It’s actually really, really easy.”
Encouraged by learning more about MMA, Rebecca viewed the flat and made sure to quiz the agent all about the mysterious purchasing method too.
“I think the most important thing to me at that point was that the agent explained that it was very straightforward. It didn’t seem quite so scary at that point.”
What is the modern method of auction and how does it work?
The story of the housing market in 2025 has been one of stability, Amanda Bryden, head of mortgages, Halifax, said (Yui Mok/PA)
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The main features of an MMA purchase as opposed to a traditional auction, is that the online auction usually lasts around 30 days rather than happening at once, and the process allows for conditional purchase.
That means buyers are not quite locked in once they’ve won the auction. They do pay a substantial, non-refundable reservation fee of around six per cent of the property price to secure the exclusive right to buy it, but they still have 28 days to exchange contracts, and then a further 28 days to pay the full amount.
Crucially, this 56-day window allows for putting a mortgage in place, opening up the sale to a lot more potential buyers.
While many sellers and buyers appreciate the expediated sale, the tighter timeframe can be a challenge in Britain’s slow-moving market – especially if those you’re working with don’t know much about MMA.
“I hear stories all the time from friends about how difficult and how slow the buying process is in the UK so I was thinking this 56-day time period could be really scary,” Rebecca says.
What she discovered was absolutely crucial to getting the purchase over the line was finding a mortgage advisor and solicitor who specialised in MMA and knew how quick and responsive they would need to be.
Rebecca had initially tried to speak to a mortgage advisor she had free access to through her work, but was disappointed.
“The guy treated me like I was trying to buy a house on eBay. He was like, ‘oh, this is a bad idea and there’s no way you could do a mortgage’. He was actually quite terrible about it. I felt like I was doing something almost irresponsible.”
A similar experience ensued with Rebecca’s bank when she tried to speak to a mortgage advisor.
Rebecca ended up going back to the estate agent and asking them to put her in touch with an advisor familiar with the system, and found Mortgage Matters who finally gave her what she needed.
“My mortgage advisor was absolutely brilliant and recommended a few (banks) that could do these time frames.
“I reached out to a few different solicitors in London, everyone treated me like I was crazy, and then I used Martin Tolhurst, who was recommended by my estate agent and they they were great.”
Rebecca also feels lucky she had a seller who had put in the time and money upfront before the auction to put together the property information pack she needed to learn all about the property.
A lot of this documentation is needed for any purchase, but can happen later on in the process and delay things, while with MMA most certificates and investigations should have been done.
You can still arrange a survey of your own, and Rebecca was even able to put a clause in her bid to say that if the survey threw up anything substantially detrimental she should be able to renegotiate or potentially pull out.
The flat in Thanet ended up being £230,000, for which Rebecca’s mortgage is between 70 per cent and 80 per cent.
She also paid the £10,350 reservation fee (which she had to pay stamp duty on) and £349 for the buyer information pack – all the information the sellers had compiled.
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It is worth noting that the reservation fee does not go to the seller, but the auction company and/or estate agent, meaning sellers do have to factor in how it might affect people’s bids.
Based on her scouring of the local market previously, Rebecca did not feel the price of the flat, which she describes as “dated but very well looked after”, was substantially affected by the fact it was sold via MMA.
On average, however, properties sold via MMA are thought to sell for around 10 per cent less than equivalent ones sold on the open market.
The loss for sellers, of course, is offset by a quicker transaction, differing fees, a fee that locks buyers in to make them less likely to back out, and a more transparent process.
MMA can be useful for sellers with a property they are worried could spend a long time on the open market, such as those with a short lease or a property in need of full renovation.
From the buyer’s perspective, the option opens up auctions to mortgage buyers and is great for first-time buyers or those without a chain who are looking to move quickly. Properties are also listed among others on RightMove and Zoopla, so buyers can include them in their search.
For those considering MMA, Rebecca’s advice is: “You’ve got to have a seller who’s on it and has provided all the information that is needed. And then you’ve got to have a mortgage advisor who understands your time commitments and a solicitor familiar with the process.”
Finally, on the buyer’s part, you need to understand the time pressures too, be ready to get things printed and signed, and rush off to the post office.
Overall, Rebecca is impressed by the process of MMA and pleased with how organised those who knew how to run it were. “I don’t find it to be a scary process.
“If you’re a first-time home buyer and you don’t know the difference, you might as well take the chance.”