4.8 Out of 5
Auction Finance
- Expertise, speed, and flexibility are essential for auction finance, particularly when facing a tight 28-day deadline for completing your purchase at auction.
Questions
How Auction Finance Works
Why Auction Finance?
When the hammer falls at auction, you are legally bound to complete — there is no cooling-off period and no room for delays. A conventional mortgage typically takes six to twelve weeks to arrange, which makes it unsuitable for the vast majority of auction purchases. Auction bridging finance exists precisely to fill this gap.
Beyond speed, auction finance is also well suited to the types of properties that appear at auction. Many are unmortgageable in their current condition — structurally imperfect, in need of significant work, or with title complications a high street lender will not accept. Specialist bridging lenders assess these differently, lending against the asset’s current value with a focus on your exit strategy rather than the property’s immediate mortgage suitability.
Whether you are purchasing a residential property, a commercial unit, a mixed-use building, or land with planning potential, our auction finance solutions are structured around your deal. Contact us before your auction date and we will agree terms in principle so you can bid with confidence.
Product Features Include:
- Borrow from £26,000
- Up to 80% LTV
- Swift turnaround times
- No early repayment charges
- Applicable to all property types in England, Wales and Scotland
- Adverse credit considered
Case studies
Some of our projects
Land Bridge for 220 Apartments
£10,400,000
Airspace Development
£1,200,000
CBILS Refinance for 4 Detached Houses
£3,400,000
Enquiry to Completion in 4 weeks
£3,600,000
our team
team of experts
FAQs
Common Questions & Answers
Can I get auction finance with bad credit?
Yes — auction bridging finance is assessed differently from a mortgage. Because the loan is secured against the property, lenders focus primarily on the value of the asset, the size of your deposit, and your exit strategy rather than your credit history. Adverse credit, including missed payments, CCJs or previous defaults, is considered by many of the specialist lenders we work with.
That said, the strength of your exit strategy matters more when your credit is imperfect. If you plan to exit by refinancing onto a mortgage, your credit history will become relevant at that point, and it is worth understanding your options in advance. We can help you assess your position and identify lenders most likely to accept your case. Get in touch before auction day and we will give you an honest view of what is achievable.
Can I use auction finance on an unmortgageable property?
Yes — this is one of the key reasons auction finance exists. Many properties sold at auction are unmortgageable in their current condition: they may have structural issues, no working kitchen or bathroom, be uninhabitable, or have title complications that high street lenders will not accept.
Specialist bridging lenders assess these properties differently. They lend against the current value of the asset and are comfortable with properties that need work, provided the exit strategy is clear. If your plan is to refurbish and refinance, or refurbish and sell, auction finance can fund the purchase — and in some cases a refurbishment facility can be structured alongside it. See our refurbishment bridging finance page for more detail on how that works.
Do I need to arrange auction finance before I bid?
You do not have to, but it is strongly advisable. Once the hammer falls at a traditional auction, you have typically 28 days to complete — and you are legally bound by contract from that moment. If you have not arranged finance in advance and then cannot complete, you will lose your deposit (usually 10% of the purchase price) and may face further liability.
Getting an agreement in principle before you bid means you know your budget, you know the likely costs, and a lender is already familiar with your situation. This makes the 28-day window much more manageable. At Finspace we can work with you ahead of an auction to agree terms in principle, so you can bid with confidence. If you have already bid and won, contact us immediately — we can still move quickly.
What is the difference between a traditional auction and a modern method of auction, and does it affect the finance?
At a traditional auction, the winning bidder exchanges contracts on the day, with a 28-day completion deadline. At a modern method of auction (also known as conditional auction), the winning bidder pays a reservation fee and has a longer period — typically 56 days — to exchange and complete. This gives more time to arrange finance.
The type of finance available differs accordingly. Traditional auction purchases almost always require bridging finance due to the tight timeframe. Modern method purchases may be achievable with a mortgage, though bridging finance is still often used for speed and certainty — particularly if the property’s condition makes it difficult to mortgage. If you are unsure which type of auction applies to a property you are interested in, check the auction pack carefully or speak to us before bidding.
What happens if I cannot complete within the 28-day auction deadline?
Failing to complete within the auction deadline is a serious outcome. You will forfeit your 10% deposit, the property will be relisted, and depending on the terms of the auction contract, you may also be liable for any shortfall if the property sells for less at a subsequent sale. It is a costly situation to find yourself in.
The best way to avoid it is preparation. Having finance agreed in principle before you bid, a solicitor already briefed on the purchase, and all your documentation ready gives you the best possible chance of completing on time. If you are approaching the deadline and running into difficulties, contact us as soon as possible — we may be able to source alternative funding or help you find a solution before the clock runs out. Do not wait until the deadline has passed.
