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Buying property at auction is a fast-paced and high-stakes process. Unlike traditional property purchases, you’ll need to pay the full amount within 28 days—or risk losing your deposit. That’s where auction finance comes in.
Whether you're a seasoned investor or a first-time buyer, understanding the right financing options can help you bid with confidence and complete the purchase on time.
In this guide, we’ll take you through every step of securing auction finance, covering bridging loans, mortgage options, and alternative funding routes.
Why Pre-Approval is Important
Tip: Pre-approvals typically last 3-6 months, so apply well in advance of the auction date.
Auction finance is typically secured using short-term bridging loans or, in some cases, specialist buy-to-let mortgages. Here’s what you need to know:
Fast approvals: Often within 24-48 hours.
Short-term: Typically 6-12 months.
Higher interest rates: Ranging from 0.5% to 1.5% per month.
Flexible repayment: Repaid through sale or refinancing.
Tip: Bridging loans are best for auction purchases, especially if the property needs refurbishments before refinancing.
Tip: Factor in all costs before bidding to avoid surprises after purchase.
Refinancing onto a Buy-to-Let Mortgage – If the property is rentable, a BTL mortgage can repay the bridging loan.
Selling the Property for Profit – Investors often renovate and sell at a higher price.
Cash Repayment – Using savings or other property equity.
Tip: Lenders require a strong exit plan before approving auction finance.
Auction Day Tips:
Tip: Always check for restrictions in the legal pack that could affect your financing.
Result: Within 6 months, James refinanced the property, repaid the bridging loan, and achieved a £70,000 uplift in property value.
Securing auction finance doesn’t have to be complicated—but it does require planning and preparation. By getting pre-approved, choosing the right loan type, budgeting for costs, and having a solid exit strategy, you can bid confidently and complete your auction purchase without delays.
Ans: Most lenders approve within 24-48 hours, with funds released in 5-10 days.
Ans: Typically 75% LTV, but some lenders may offer more with additional security.
Ans: Yes, bridging lenders focus on property value & exit strategy, not just credit score.
Ans: Yes! Lenders require a clear plan (e.g., refinancing or selling) before approval.
Ans: Yes, but if the property needs work, you may need a bridging loan first.
Get in touch today for expert advice!
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