Auction Finance believes novice property developers snapping up bargains at auction are losing money by falling foul of planning regulations.

The company said there was a rise in the number of people buying unusual buildings at auction to turn into homes, but if planning permission cannot be secured this can become an expensive error.

Scott Hendry, new business manager at Auction Finance, said: “Auctions are a great way of picking up unusual properties. However, before jumping in and bidding for an unusual property to turn into a home, buyers should check the planning status of the site. This will avoid disappointment and the potential for an expensive mistake.

“A good proportion of properties that are auctioned for redevelopment will have had planning permission of some kind granted before they go under the hammer. This adds value for the seller and in cases where it has not been done it is worth enquiring at your local planning department to find out why before you decide to make a bid. This is an approach we often see from some of our more experienced clients.”