When the hammer falls, the clock starts. Most auction purchases need to complete within 28 days. A standard mortgage cannot be arranged in that timeframe. A specialist bridging lender who understands the auction process can, and we work with the ones who actually deliver.
Auction finance is usually a short-term bridging loan that lets you complete an auction purchase within the typical 28-day deadline, which a standard mortgage cannot meet. The loan is repaid by selling the property or refinancing onto a long-term mortgage, so the exit and the legal pack should be checked before you bid.
The difference between winning an auction purchase and losing your deposit often comes down to whether your finance was properly arranged before you walked in. Not a vague pre-approval. A genuine commitment from a lender who has looked at the property and confirmed they will lend.
We arrange short-term bridging finance that gives you the certainty to bid on auction property: residential, commercial and mixed-use. The bridge secures the purchase. Your exit is either a sale after refurbishment or a move onto a long-term mortgage once the property meets standard lending criteria.
The most important part of any auction finance conversation is the exit. If the property needs work before it is mortgageable, we need to understand the timeline and the budget before you bid. If you plan to refinance, we need to know that the exit product is available to you. Getting this right before the auction is the job.
The two auction formats commit you in very different ways, and the finance has to match. In a traditional auction, contracts exchange the moment the hammer falls. You pay a 10% deposit that day and complete within 28 days, sometimes 20. There is no cooling-off period and no subject-to-finance clause. If you cannot complete, you lose the deposit.
The modern method of auction, sometimes called conditional auction, works differently. You pay a non-refundable reservation fee and then typically have 28 days to exchange and a further 28 to complete. The longer runway can allow a standard mortgage in some cases, but the reservation fee is at risk throughout and is often not credited against the purchase price.
Knowing which format you are bidding in changes the lender, the product and the cost. It is the first thing we establish.
Every auction lot comes with a legal pack: title documents, searches, leases, and the special conditions of sale. It is published before the auction and it is your responsibility to review it. Bidding is taken as acceptance of everything in it.
Special conditions are where auction purchases most often go wrong. It is common for the buyer to be required to pay the seller's legal costs, search fees or arrears. A buyer's premium may apply on top of the hammer price. Occasionally the pack reveals something that materially affects value or lendability altogether: a short lease, a restrictive covenant, an absent title, a tenancy that cannot easily be ended.
We will read the pack with you before you bid, specifically for the things a lender will react to. A condition you can live with might still be one that stops a lender proceeding, and finding that out after the hammer falls is expensive.
A large share of auction stock is there precisely because a mainstream lender will not touch it. The common reasons are consistent: no functioning kitchen or bathroom, a lease with too few years remaining, structural movement, non-standard construction, fire damage, or a property that is simply uninhabitable in its current state.
This is not a problem so long as it is planned for. Bridging lends against the property as it is and against a credible plan to change it. The finance question is not whether the property is mortgageable today, but whether it will be by the time you need to exit, and how long that will take.
Where refurbishment is involved we look at the scope honestly. A light refurbishment that does not touch the structure or require planning is a straightforward case. Heavy refurbishment, structural work, or anything needing consent takes longer than most first-time buyers at auction expect, and the bridge has to be sized for the real timeline rather than the optimistic one.
The legal pack, so the lender's view of title and conditions is known in advance rather than discovered in the middle of a 28-day clock.
A realistic view of value and works, including the purchase price you are prepared to go to, the refurbishment budget and the expected value once complete.
The exit, evidenced. If you are selling, the basis for the expected sale price. If you are refinancing, confirmation that you will meet the criteria of the exit product, not merely a hope that something will be available.
Proof of the deposit and the costs. Bridging does not cover the full purchase price, and the arrangement fee, valuation, legal fees and the first months of interest all need funding alongside your deposit.
We can review the legal pack, discuss the property's condition and the likely lender appetite, and give you a clear picture of what finance is available and at what cost before you register to bid. That conversation is free. It means you arrive at the auction knowing what you can spend and what you are committing to if you win.
Where the legal pack has been reviewed in advance and the exit is clear, auction bridging can usually be completed inside the 28-day window, and faster on straightforward security. The delays that cause problems are almost always avoidable ones: a legal pack read for the first time after the hammer falls, or a valuation instructed late.
You can, but it is the most expensive way to do it. Contracts have already exchanged in a traditional auction, so you are committed and working to a fixed deadline with no leverage. We would far rather speak to you before you register to bid, and that conversation costs nothing.
You pay 10% on the day to exchange. Beyond that, most auction bridging runs to a maximum of around 75% loan to value, so you should plan to fund at least 25% of the value yourself, plus the arrangement fee, valuation, legal costs and interest if it is not being retained.
In a traditional auction you will typically forfeit your 10% deposit, and the seller may pursue you for further losses if the property is resold for less. This is the single biggest risk of bidding without finance properly arranged, and it is why the exit matters more than the rate.
Yes, and this is one of the main reasons auction finance exists. A property with no kitchen or bathroom, or one that is otherwise unmortgageable, can be funded on a bridge provided there is a credible plan and budget to bring it up to a lendable standard, and a realistic timeline for the exit.
Bridging rates typically run from around 0.5% to 1.5% per month depending on the loan size, loan to value, property type and exit, with an arrangement fee usually in the region of 1% to 2%, plus valuation and legal costs. Figures are indicative and depend on the lender and the case. We set out the full cost before you commit to anything.
Auction bridging is typically unregulated unless the property is intended for the borrower or a family member to occupy. The distinction will be made clear at the outset of any application.
If you do not complete within 28 days of the auction, you will typically lose your deposit and may face additional liabilities. Bridging finance is a high-cost, short-term product. A clear, realistic exit strategy is essential before you bid. Any rates or fees referenced are illustrative and depend on the lender, the property and the exit route.
Lender criteria varies and is subject to change. Property values can fall as well as rise. Past placements do not guarantee future outcomes.
If you are bidding at auction, whether for a buy-to-let, a refurbishment project, a commercial unit or a mixed-use building, the finance has to be in place before the gavel falls. We work with regular auction buyers and first-time bidders alike.
Don't bid first and figure out the finance after. Talk to us first.
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