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Get the House of your Dreams for Less

Be brave and bid for your home

Build your home from scratch

Housing auctions
Self-build homes
Buying with a friend or partner

There are more ways than you might think to buy the kind of home you want. So if you’re struggling to find what you need the conventional way, here are a few alternative approaches you could consider to get that property of your dreams:

Auctions

Although a housing auction might seem like a very daunting prospect (and there’s no denying you need to know what you’re doing!), if you do your homework you could land yourself a real bargain. Harder to sell properties which are often in need of a bit of TLC, are offered at competitive ‘reserve’ prices considerably below market value. As well as the money-saving bonus, auctions cut out the usual long drawn out process of house buying.

Now, we have to be honest from the outset here, this option does involve a considerable amount of effort. But if you’re willing to put the time and energy in, you really stand a chance of saving some serious cash. So, how do you do it?

^{Step one:}

Attend a few auctions as an onlooker first. That way you'll get a feel for what goes on and you'll be much less apprehensive when the time comes to bid for real.

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Find out about future auctions in your area as much in advance as possible. Unfortunately this actually isn't as straightforward as it sounds. The best way to do it is to subscribe to a website which sources the information you need from various auction houses. We recommend the Essential Information Group who are the only comprehensive auction site with the approval of every auction house in the UK. Now, subscription isn't cheap at £125 - £500 depending on how long you sign up for, but its a small price to pay if you consider the eventual saving you stand to make. The site has a vast amount of properties, all the auction dates and some essential legal documents all available to subscribers.

^{Step three:}

Be a step ahead! Make sure you get hold of the auction catalogue as soon as it's printed, usually about four weeks prior to the auction. That way, you'll have plenty of time to carry out all the necessary preparations.

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Once you've picked out a property that interests you, get in touch with the auction house selling it to arrange a viewing. Whilst looking around, find out the opinions of local residents and estate agents.

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After the initial viewing, if you're still interested, make sure you organise the conveyance and get legal advice from your solicitor. You will at this point require a legal pack from the auction house. There will be a charge for this which is at the auction house's discretion; usually it's around £10-£15. However the Essential Information Group does sometimes have these available to subscribers online if the auction house has agreed to this.

^{Step six:}

Make sure you have a survey of the property. Mary Sanderman of the Essential Information Group recommends getting a full survey done, it might cost you a bit more she says, but otherwise you just don't know what you're getting. If you have a better idea of how much work needs doing you won't get any nasty surprises, you'll be able to make a more informed offer and won't pay over the odds for your property.

^{Step seven:}

Once you have decided upon your price you will need to allow some time to arrange a firm offer of a mortgage with a lender. Explain to them that you plan to buy at auction.

^{Step eight:}

On the day of the auction call ahead to make sure there haven't been any last minute changes to your lot. This is known as the addendum, a sheet listing any changes to the entries in the original catalogue. This is really important so remember to check it thoroughly before you bid, it's very common for most of the entries to have had at least some adjustment.

^{Step nine:}

Set yourself a price limit on the property before the auction and stick to it. NEVER get carried away, because successful bidders are legally bound to buy.

^{Top Tips}

If you're confused by any of the auction jargon, check out The BBC homes' great glossary to help you make sense of it all.
Don't take your solicitor to the auction - you'll just be paying unnecessary money for their time; you can bid yourself!
However, if you're really nervous about bidding you can opt to bid over the phone - just call the auction house prior to the auction to make arrangements for this. You can also get someone at the auction house to bid for you. As long as you provide your fixed maximum offer, this is easy to arrange.
Having had our first experience of a housing auction in an effort to provide you with the best information, we can tell you that it is quite nervewracking! Do take note of Step one, it's definitely worth attending as many auctions beforehand as you can, you can pick up tips on smart bidding quite quickly and feel much more comfortable.
Make sure you arrive early so you've time to ask any questions you want to, and to get more settled. At the auction we went to, the auctioneer did run through the procedures at the beginning for first timers which was very reassuring.

To give you an idea of just how much you can save, at the auction we visited on the 21 July a 4-bedroom semi-detached house in Surrey (ok, it did need a bit of work doing to it) sold for £167,000!This kind of house in Surrey would normally go for between £400,000 to £500,000.

Self-build

Over 25,000 people build their own home each year. It may seem a bit extreme - especially if you have little experience in this field - but you don't have to be a builder yourself. Just be willing to look for land, bring in an architect and have the patience to project manage the work while the house is being built (probably for 12-18 months).

Selfbuildit explain that 'the average self-build project costs around £140,000' and a well-run self build project should see the final value of the home increase by 20-30% on the actual building and land costs once it is finished. So, if you're prepared to wait and do the work, you can make some sensible money on it. For more information on how to go about building your own home check out Ebuild, the Self Build ABC website and Build It magazine. These will all advise you on how to find yourself a plot of land, plan your project management and get help from a self-build company and their architects.

Alternatively, make it easier for yourself and get a flat-pack home. These are increasingly popular and there are now lots of designs to choose from. There's still a lot of building involved but a lot of the work is done for you, and your house can be assembled in a mere 10 weeks! The kit home - where a major part of the house itself is made in a factory somewhere - is just another example of the prefab building, but rather nicer and more solid! There are all sorts of companies around the world making kits in all kinds of materials (timber, obviously, but also metal structures and some using former freight containers!), and it's worth spending some time researching what's out there.

^{Top tips for self-build success}

Make sure you have thoroughly checked out your self-build company on the self-build websites and magazines first.
Consider looking at magazines like House & Garden and the Homebuilding & Renovating magazine for inspiration.
There are more and more mortgages on the market for self-build schemes and many will lend up to 95% of the cost of doing the building. Have a look at Thisismoney's advice on getting mortgages tailor made for self-builders.
The Build Store National Self Build and Renovation Centre in Swindon is a great place to have a look at if you're considering the any of the self-build options, and until 30 September there's free entry at the weekends!

Buying with a friend or partner

If those two options sound a bit too much like hard work to you, you could always consider joint ownership. Two wages are better than one, especially if you're looking to get a fairly large mortgage, but beware money matters with a friend or lover can lead to problems! Obviously you need to know you can stand living with them day in, day out, but even if they're wonderful, you should get things ironed out by a legal expert to protect you both.

According to the law, you can own a house with someone else either as joint tenants or as tenants-in-common and although in theory it's the same, legally there is a very important distinction.

^{Joint owners}

Where two people simply both own the whole house between them. Neither has a separate share they can sell. There's no fancy word or process to describe this. If one of the owners dies, the other automatically becomes the full owner of the house and no will written by the friend and co-owner giving it to his family can change that. This is a common type of ownership between married couples.

^{Tenants-in-common}

This is when you both own half of the house (or a different percentage depending on what you agree). So each joint owner has a distinct share of the house meaning that if one of the owners wishes to leave his or her share to someone else they can. The other person cannot just sell the house and get all the money. It has to be divided up according to the percentages agreed. So if you are living together, or you are just friends trying to save money by living together, this protects you both. If one wants out, the other owner will have the option of buying up their share of the property too.

Joint ownership means you can share your all your bills, the initial legal costs of buying a property and your mortgage repayments. So both these options can allow you to buy a property when you otherwise might not have been able to. You can get yourself on the property ladder, have a real investment in your property and of course the potential to make a profit if and when you decide to sell.
For more information on joint ownership, and getting a joint mortgage have a look at this website.

If you are a first time buyer, and would like specific information on any of these options, check out First Rung Now.

Useful links

Now see how you can look for a home the traditional way.
Check out our very own mortgage information and advice.
Got any tips on housing auctions, self-builds or joint ownership? Tell everyone about them on our messageboards.

Joanna Robinson
Moneymagpie Moneypedia
22.07.2008