Auction Finance

Buying at auction requires speed and certainty. You pay 10% on the day and the balance within 28 days — there's no room for delays. We arrange fast, reliable auction finance so you can bid with confidence.

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How auction finance works

Auction finance is a form of bridging loan specifically designed for the tight timescales of auction purchases. Here's the typical process:

Before the auction

We arrange a provisional agreement in principle based on your circumstances and the type of property you're looking at. This gives you a clear borrowing limit to bid within.

On auction day

If you're the winning bidder, you pay the 10% deposit immediately. You then have 28 days to pay the remaining balance (or 56 days for some modern auction methods).

Fast-track valuation

We immediately instruct a valuation of the property. Specialist auction lenders have fast-track valuation processes that can be completed within days.

Completion

The loan is drawn down and completion happens within the auction deadline. You now own the property and can begin any planned works or arrange long-term finance.

Why auction properties are assessed differently

Many properties sold at auction are there because they can't be sold through traditional channels. They may need significant work, have legal complications, or be in conditions that standard mortgage lenders won't accept. Auction finance lenders understand this and assess properties differently:

Properties without kitchens, bathrooms, or functioning utilities can be financed
Structural issues, subsidence history, or non-standard construction are considered
Development potential and post-refurbishment value are factored in
Additional renovation finance can be layered on top of the purchase price

Cost considerations

Auction finance is more expensive than a standard mortgage, but the speed and flexibility come at a premium. Here's what to expect:

Monthly interest rate0.45% – 1% per month

Arrangement feeTypically 1-2% of the loan

Valuation feeFrom £300 (depends on property value)

Legal feesFrom £500 (lender's solicitor)

Exit feeSome lenders charge, many don't

Many auction buyers find that the lower purchase price achieved at auction more than offsets these costs. We'll always provide a full cost breakdown before you commit.

Frequently asked questions

How does buying at auction work?

When the hammer falls, you're legally committed to purchase. You pay a 10% deposit on the day, and the remaining 90% must be paid within 28 days (sometimes 56 days for modern auction methods). Failure to complete means losing your deposit and potentially facing legal action.

Can I get a mortgage for an auction property?

Standard mortgages are rarely fast enough for auction purchases. Bridging finance is the most common route — it can be arranged in days rather than weeks. Once you own the property, you can refinance onto a standard mortgage if it's in mortgageable condition.

How much does auction finance cost?

Auction bridging finance is more expensive than a standard mortgage — typically 0.45-1% per month plus arrangement fees. However, the speed and certainty of completion is the trade-off. Many buyers find that the lower purchase price at auction more than offsets the higher finance costs.

Can I get approved before the auction?

Yes, and we strongly recommend it. We can arrange a provisional agreement in principle before auction day, giving you confidence to bid knowing that finance is likely in place. Full approval is subject to a property valuation, which we fast-track after the auction.

What if the property needs work?

Many auction properties are sold because they need refurbishment. Bridging lenders are comfortable with this — some will even fund the renovation costs on top of the purchase price, with funds released in stages as work progresses.

Bidding at auction soon?

Get in touch before auction day and we'll arrange provisional approval so you can bid with confidence.

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