Unsuccessful bidders at property auctions collectively racked up losses of nearly £22m last year, according to auction website Humraz.com.
The online auctioneer has investigated the cost of the professional services conducted prior to property auctions, including fees paid to lawyers and surveyors.
It found that pre-auction fees per consumer can add up to more than £1,000, with no guarantee that bidders will secure their desired properties.
Humraz.com says that for every auction winner, there is at least one loser effectively wasting their money.
Based on an estimate of two disappointed bidders per lot and 60% of those bidders spending £1,000 on pre-auction surveys, legal checks and mortgage arrangements, Humraz.com calculates that £21.96m was wasted in 2006.
Buying property at auction is in-creasingly popular despite the financial risks involved. There has been a 132% rise in the number of residential lots sold at auction in the past decade. Last year, 18,303 were auctioned.
Humraz.com is offering people the chance to bid for a £180,000 flat in Woking for under £9,000. It costs £3 to table a bid and the winner will be the lowest unmatched bid. The maximum bid is £9,000, meaning the winner will ac-quire the house for less than 5% of its market value.
The auction will close once Humraz.com has made enough money to cover the cost of the property and the running costs of the auction.
Asmat Monaghan, founder of Humraz.com, says: “There is an element of risk involved in our auctions, but this is minimal compared with traditional property auctions. And given that our properties always sell for less than 5% of their market value, the rewards are much greater too.”