How auction finance works
At a traditional auction, exchange happens when the hammer falls. You pay a 10% deposit on the day and must complete, usually within 28 days. Miss the deadline and you can lose your deposit and be liable for the seller's costs. A mortgage rarely completes in 28 days. A bridging loan can.
- Before the auction: send us the lot details and legal pack. We check lender appetite, flag any problems in the pack and get you an agreement in principle.
- Auction day: you bid with the finance lined up and your maximum bid already sense-checked against the lending.
- Days 1–5: we submit the full application and the valuation is instructed. Houses and flats up to £500k can often use a desktop valuation, which saves days.
- Days 5–21: solicitors complete the legal work. We chase every party daily.
- Completion: funds go to your solicitor ahead of the deadline.
Read the legal pack before you bid
Most auction finance problems start in the legal pack. Look out for:
- Short leases: under around 80 years can limit lending, and under 60 can rule it out.
- Special conditions that make you pay the seller's legal costs or arrears.
- Completion periods shorter than 28 days.
- Title issues, missing searches, or flying freeholds.
- Non-standard construction, which many lenders will consider but some won't.
Send us the pack before auction day and we'll tell you whether a lender will accept it.
Modern method of auction
With the modern method of auction you usually pay a reservation fee and have 28 days to exchange, then a further 28 days to complete. There's more time, but the reservation fee is often non-refundable, so finance still needs to be lined up early.
Planning the exit
Many auction buyers refurbish and then refinance onto a buy-to-let mortgage, or sell. Your lender will ask which, and want to see it's realistic. If you plan to let, we can arrange the long-term mortgage at the same time, with no minimum ownership period before refinancing. Read more about exit strategies.
Frequently asked questions
Can I get auction finance after I've already won the lot?
Yes, but call us the same day. It's much easier to complete in time when we start early, and some lenders need a full valuation that takes time to book.
Does the 10% deposit count towards my contribution?
Yes. The deposit you paid on the day counts towards your equity in the deal. The bridge funds the balance up to the lender's maximum LTV.
Can I borrow against the value rather than the auction price?
Where a property is bought below market value, some lenders lend against the valuation rather than the price, up to around 90% of the purchase price. This is usually for experienced landlords and traders.