Bridging finance for auction purchases
Auction Property Finance
Bridging finance built around the auction timetable: terms in principle before you bid, funding certainty on the day, completion inside 28 days. Residential, commercial and mixed-use lots, with refurbishment funding built in where the property needs work.
Typical auction finance terms
Why auction purchases need their own kind of funding
When the hammer falls you exchange contracts on the spot: the 10% deposit is paid that day and completion is contractually fixed, usually 28 days later. A mortgage application cannot reliably hit that deadline; auction finance exists because bridging can. The lender underwrites at bridging speed, values quickly (desktop valuations are common on straightforward residential lots) and completes the purchase against the clock, with the loan repaid when you refinance onto a mortgage or sell. Mortgages remain the cheapest way to hold property; auction finance is how you borrow to buy property mortgages cannot reach in time.
The discipline that makes it work is sequencing. Buying at auction with funding arranged afterwards is how deposits get lost. We arrange auction finance in principle before the auction: you walk in knowing your maximum bid, your rate and your day-one advance, and bid with the confidence of a cash buyer.
Auction lots and refurbishment go together
Most investors are at the auction house for the same reason: the lot is unmodernised, part-complete or outright unmortgageable, so owner-occupiers and mortgage buyers are priced out of the room. That makes auction finance and refurbishment bridging loans two halves of one product: the facility completes the purchase inside the deadline and funds the schedule of works, in arrears on light refurbishment projects or in staged drawdowns on heavy ones. One loan, one set of fees, one exit at the improved value.
What auction finance funds
- Residential property: houses and flats bought to refurbish, let or sell, at up to 75% LTV
- Commercial property: shops, offices and industrial buildings, typically 65 - 70% LTV, including commercial lots bought for residential conversion
- Mixed-use lots: shop-with-uppers and similar hybrids, priced between the two
- Land with planning: case by case, usually as the front end of a development facility
- Unmortgageable properties: no kitchen or bathroom, short lease, structural issues: the classic auction stock a mortgage cannot buy
A worked example: unmodernised auction house
Worked example
Auction purchase of an unmodernised 3-bed semi, hammer price £160,000. £30,000 light refurbishment, end value £235,000, exit by refinance onto a buy-to-let mortgage.
Figures
Indicative figures for illustration only. Lender criteria vary and every figure is confirmed in a formal offer.
A short guide to being auction-ready
- Before the catalogue closesSend us the lots you are watching. We give you indicative terms per lot: advance, rate, fees and your true maximum bid.
- Before you bidLegal pack reviewed by your solicitor; decision in principle from the lender. Ten minutes of preparation that protects a £16,000 deposit.
- Auction dayYou bid to your funded limit, pay the deposit, and we start the completion clock with valuation instructed within days.
- Completion and worksThe facility completes inside the deadline. If the property needs work, the works funding is already structured in.
Auction finance questions: a buyer's guide
Auction finance is short-term bridging finance arranged around the auction timetable. You get terms in principle before the auction, bid knowing your funding, pay the 10% deposit on the day from your own cash, and the bridging loan completes the remaining balance inside the 28-day deadline. You then refinance or sell to repay it.
Yes, that is what the product exists for. Auction finance lenders underwrite fast, use desktop or short-form valuations on straightforward residential properties and expect solicitors on both sides to work to auction deadlines. The buyers who miss deadlines are usually the ones who started arranging funding after the hammer fell, not before.
You pay 10% of the purchase price at the auction itself, and the bridging loan typically advances up to 75% of the purchase price (or of the lower of price and value). In practice plan to fund around 25% plus fees from cash across the whole purchase, more where the property needs significant work.
Yes, and this is where buying at auction and refurbishment finance meet: a large share of auction lots are unmodernised or unmortgageable, which is why they are in the room in the first place. A refurbishment bridging loan completes the purchase inside the deadline and funds the works, with the exit by sale or refinance at the improved value.
Yes. Commercial and mixed-use lots (shops, offices, land with planning) are financeable with the same structure at slightly lower leverage, typically 65 - 70% LTV. Commercial auction purchases bound for residential conversion sit naturally with heavy refurbishment finance sized on end value.
You lose your 10% deposit and can be pursued for costs, which is why funding certainty matters more at auction than anywhere else. Get terms in principle before bidding, instruct a solicitor to review the legal pack before the auction, and set your maximum bid to the facility you know you can secure.
Bidding soon?
Send us the lot number and the legal pack link. We will come back with indicative terms and your funded maximum bid, usually the same working day.