Guide price and reserve price are two of the most misunderstood terms in UK auctions. Confusing them costs buyers money. This guide explains the difference, the rules that govern them, and how to use pricing signals to your advantage.
What is a guide price at a UK property auction?
A guide price is the public marketing figure published in the auction catalogue. It is an indication of where the auctioneer expects bidding to open, not a valuation and not the minimum the seller will accept. Guides are published as either a single figure (for example, “£125,000”) or a bracket (“£120,000 to £130,000”). The purpose is to attract buyer interest before the auction.
Guide prices are set by the auction house, typically in consultation with the seller. They are not regulated by law but are governed by RICS (Royal Institution of Chartered Surveyors) guidance and by consumer protection rules under the Consumer Protection from Unfair Trading Regulations 2008.
The guide figure in the catalogue is a starting signal. The actual sale price is set by competition on the day. In strong markets, lots routinely sell 15% to 40% above guide.
What is a reserve price?
A reserve price is the confidential minimum price the seller will accept for the property. It is agreed between the seller and the auction house before the auction and is not disclosed to bidders. If bidding does not reach the reserve, the lot is withdrawn unsold.
Reserves are usually set slightly above the guide price, though by how much varies. RICS guidance states that the reserve should be no more than 10% above a single figure guide, or should sit within a published guide price range. This is the key consumer protection: it stops sellers from publishing artificially low guides to attract interest that the reserve then prices out.
During bidding, the auctioneer signals when the reserve has been met with phrases such as “I am selling”, “I am going to sell”, or “on the market”. Until you hear those words, the lot is not yet contracted even if bidding exceeds the guide.
Guide price vs reserve price vs sale price (with comparison table)
Three different numbers apply to every auction lot. The table below shows how they relate.
| Figure | Who sets it | Is it public? | Binding? | Source of truth |
|---|---|---|---|---|
| Guide Price | Auction house and seller | Yes, published in catalogue | No, marketing signal only | Auction catalogue |
| Reserve Price | Seller and auction house | No, confidential | Yes, minimum sale price | Internal to auction house |
| Starting Bid | Auctioneer | Sometimes announced | No, just the opening | Auctioneer on the day |
| Hammer Price | Set by competitive bidding | Yes, announced publicly | Yes, contract price | Auction result |
| Sale Price (Registered) | Hammer plus any adjustments | Yes, 4 to 8 weeks post sale | Yes | HM Land Registry Price Paid Data |
The hammer price and the registered sale price are the same in most cases, but can differ slightly due to post-auction negotiation on unsold lots or rounding in the Land Registry system. HM Land Registry Price Paid Data at landregistry.data.gov.uk is the definitive source for historical actual prices.
How are guide prices set?
Auction houses use a mixture of comparables, seller expectations, and market psychology to set guide prices. A property with strong investor appeal in a hot market may be guided at 10% to 15% below expected sale value to generate competitive interest. A harder to sell lot, such as a tenanted flat with a short lease, may be guided closer to the seller’s minimum reserve.
Three factors dominate the guide setting process. First, the seller’s minimum acceptable price (the reserve). Second, recent auction results for comparable properties. Third, the amount of interest the auction house wants to drum up. A lower guide almost always generates more viewings, more legal pack downloads, and more registered bidders.
The consequence is that guides are strategic, not valuational. Do not treat them as expert opinions on market value.
Why are guide prices often lower than the eventual sale price?
Guide prices are systematically lower than final sale prices in most active UK regional markets. Analysis of auction catalogues and subsequent Land Registry sale records regularly shows lots selling 15% to 40% above the published guide, with the highest markups in North West, Yorkshire, and Midlands investor markets.
The reason is behavioural. A low guide creates anchoring, attracts more bidders, and generates a bidding auction dynamic. Bidders who would never have offered £160,000 on an estate agent listing will happily bid £155,000 on a lot guided at £120,000, because the starting point frames the whole negotiation.
This is precisely why experienced investors ignore the guide and build their maximum bid from first principles: after refurbishment value, refurbishment cost, holding costs, and required margin. The guide is useful as a signal of seller psychology, not as a valuation input.
What does a reduced guide price tell you?
A reduced guide price is a strong motivated seller signal. When an auction house lowers the guide in the final days before an auction, it means the first round of viewings and legal pack downloads did not translate into registered bidders. The auction house is telling the seller to drop expectations to get the lot sold.
Reduced guides often come with correspondingly reduced reserves. This is one of the best opportunities for value bidding. The catalogue history is public: many auction house websites publish the original guide alongside the new figure, and third party platforms like Estately.uk track guide price changes over time so you can see the direction of travel.
Watch for lots where the guide has been reduced twice. Double reductions almost always signal a seller who needs the deal done and a reserve that has moved significantly.
The RICS guidance on guide and reserve prices
RICS publishes guidance for auctioneers on guide and reserve pricing. The guidance has two core rules. First, the reserve must not exceed the single figure guide by more than 10%. Second, if the guide is a range, the reserve must fall within that range.
The guidance exists to protect buyers from bait and switch guide prices. Without the rule, an auction house could publish a £100,000 guide on a property with a £140,000 reserve, wasting buyer time and legal pack fees. The 10% cap keeps the guide meaningful as a minimum price indication.
The RICS guidance is enforced through professional standards rather than statute, but most reputable UK auction houses follow it. Breaches can also trigger complaints under the Consumer Protection from Unfair Trading Regulations 2008.
How to use guide price data when bidding
Use guide prices as a signal, not a valuation. Three practical tactics help.
First, benchmark every guide against HM Land Registry Price Paid Data for the postcode. Pull the last two years of comparable sales at landregistry.data.gov.uk and calculate a price per square foot. Compare that to the guided figure. If the guide implies a much lower price per square foot than comparables, expect serious competition.
Second, track guide price changes. A reduced guide is a motivated seller. An increased guide (rare but it happens) indicates stronger than expected interest. Platforms that track auction data over time make these changes visible.
Third, ignore the guide when setting your maximum bid. Build your bid from the deal: ARV, works cost, holding costs, finance costs, stamp duty, and required profit margin. Compare your bid to the guide only to sanity check whether the lot is realistically winnable. If your max is 20% below the guide, the lot is probably not for you. If it is 20% above, expect competition.
Frequently Asked Questions
See the FAQs at the end of this guide for answers to common questions about guide prices, reserves, and how auction pricing works in practice.
For a broader overview of UK property auctions, see UK Property Auctions: The Complete 2026 Guide. For a deep dive on finding hidden value at auction, see Property Auction Arbitrage.