Technically he is still the registered owner of the property until your solicitor finalises the transfer of ownership in your favour. Legalities aside, he has the existing keys and as such, he can go in and out and deal with the fixtures and fittings as he sees fit - up until your lawyer gives you the green light and you proceed to change the locks. Up to that date, whatever in the house still belongs to him. But once you change the locks - you're considered to have taken over posession of the property as the new owner (normal vacant posession would involve the handing over of the keys to signify change of ownership). He has no right over anything left in the house by then. You can stake your claim to it by then - but most people either throw it out or donate to charity, from what I know.
The ex-owner has no right to demand a single cent from you. Do not pay him anything. In fact, it would appear that he doesn't even want the stuff in the house and this may seem like a desperate attempt to squeeze some money out of you by making these baseless threats. Perhaps he can't afford to even hire movers to remove his belongings. Go lodge a police report that he threatened you for your record purposes. Perhaps next time when you change the locks you can bring it to the attention of the police and they can send someone to accompany you to ensure that the ex-owner does not cause any problems.

The problem which you are facing is the reason why a lot of people shy away from buying houses on auction, despite the temptation of lower-than-market-rate prices of same. The hassle can be too much to bear when there is someone still occupying the premises, which is often the case.

Facing a belligerant ex-owner is one thing - there have been instances where the ex-owners completely destroy the fixtures and fittings of the house before leaving and the new owners faced a huge repair/reno bill which would be more than the savings you made when purchasing the property below the market rate. Ex-owners who literally 'paint' the wall with faeces, ex-owners who leave mysterious small puppets, miniature altars, ornaments, etc in the house. Trust me, I've heard it all.

Best if you also speak to your lawyer and see if they can assist you in any way. Perhaps send a notice of eviction to the ex-owner and see if that shakes him up a bit. Pray that he just gives up and go away in peace. 

That's the grey area right there. Legally the ex-owner is still the registered proprietor, so he can do as he wishes. If the ownership is still in the process of transferring, as you put it, then the new owner is still not yet the registered proprietor, right? So she can't really do anything to stop the ex-owner from doing whatever he wants to the property. Be that as it may that the property has been auctioned off, the new owner is still not the legal owner.

The important thing to bear in mind is that the property would be sold on an 'as is where is' basis. And as it where is would be when you finally get the green light to obtain vacant posession of the property - if it means getting a locksmith to break the locks, then what you see when you step inside is what you get - it is as is, where is. That is the risk attached to purchasing auction properties.

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