Auction Bridging Finance

If you are buying a property at auction and don’t have the funds to purchase outright, then you’ll typically need to fund your purchase with an auction bridging loan.

Auction bridging finance is designed to move quickly, with rates available from 0.55% per month, subject to LTV and property type.

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    Fast Funding Auction Bridging Loans For All Property Types

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    What is auction bridging finance?

    Auction bridging is a specialist type of bridging finance that is designed to complete within a 28-day timeline, often quicker.

    Due to an auction house’s tight completion deadlines,  it’s important to work with lenders and brokers who can offer speed, efficiency, and flexibility when dealing with the loan.

    Finance is available for individuals and limited companies, and the bridging loan can be secured against most property types.

    We’ll get it done…

    If you have purchased a property at auction, or looking to purchase a property at auction, we can assist with arranging the finance to enable a smooth, fast and efficient completion.

    Loans are available from £25,001 to £25m, with funding available for up to 24 months.

    We’ll compare the whole market to find the best deal, with Zero broker fees charged.

    Call us on 01604 212879 for a no obligation auction bridging quote.

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    Fast Funding Auction Finance

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    Rates from 0.55% per month

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    Terms From 1 to 24 Months

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    Automated Valuations Available

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    Residential, Commercial & Land

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    Rolled Up Interest

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    NO BROKER FEES

    Our Guide To Auction Bridging Finance

    Author: Darren Ferguson – Bridging Specialist & Owner

    First Published: 21st May 2024

    Read Time

    Read Time – Approximately 8 Minutes

    Our auction bridging guide should be helpful, but it’s always best to speak with an adviser to discuss your circumstances and get the best advice. Call us on 01604 212879 should you have any questions.

    How does auction bridging finance work?

    Auction bridging loans work much the same as any other bridging loan. 

    The bridging loan is a short-term loan, typically ranging from 3 to 12 months and is secured as a first charge against the property to be purchased. It’s also possible to use other properties that are already owned as additional security to help with the loan to value, which in turn could reduce the interest rate for the bridging loan. 

    Here are some points to note:

    • The maximum LTV is typically 75%, although in some circumstances we can obtain a higher LTV.
    • Typically, there are no monthly payments as the interest is either rolled up or retained.
    • Lending is typically secured on the lower of the purchase price or the valuation, although borrowing against the market value is possible.
    • 2nd Charge bridging is available for properties to be used as additional security.

    How much of a deposit will I need for auction finance?

    If you are successful at the auction, you’ll need to put 10% down as a deposit immediately and will need to pay the remainder within 28 Days.

    It’s best to have your finance agreed before going to auction, so we always recommend getting an agreement in principle before you bid. This can help confirm the maximum you can or might wish to bid.

    Typically, the maximum loan to value lenders will go to is 75%, but this generally has to be inclusive of any fees and interest that might be retained, meaning the net amount to be lent will be less than 75%, more typically around 68% to 70%, depending how long the bridge is needed for.

    Here is an example from one of our lenders:

    • Purchase Price of £140,000
    • 75% Gross loan would be £105,000
    • 6 month bridging loan required
    • Example Rate of 0.69%pm.

    The lender retains 6 months of interest and after deduction of other fees, the net loan amount received is shown as £98,614, which is an actual LTV of just over 70%.

    Points to note:

    • The longer the bridge is required, the more interest will be retained, reducing the net loan, meaning a greater deposit is needed.
    • Choosing to service the bridge each month will allow for a greater net loan amount, but this will be subject to affordability checks and enhanced underwriting.
    Example of an auction bridging quote

    Auction Bridging Rates Starting From 0.55%pm – Call us on 01604 212879 or request a quote below.

    Learn More About Bridging Finance

    Our guide to bridging finance will cover all the basics and more of how bridging loans work and what type of bridging might be best for you. 

    • Bridging Finance Criteria
    • Different types of bridging loans
    • Bridging for different property types
    • Interest servicing methods and loan to values
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    What are the costs of auction bridging finance?

    The following fees typically apply with auction bridging loans:

    Lender Arrangement Fee – this will range from 1.5% to 2% of the loan amount to be borrowed. This can typically be added to or deducted from the loan advance. Working with a lender that can add the loan above 75% LTV will help increase the net loan amount on day 1.

    Valuation Fees – If a physical inspection of the property is required then you’ll need to cover the cost of this upfront. Its generally not possible to add valuation fees to the loan. The cost of the valuation will depend on the property value. Some lenders now offer automated desktop valuations, known as an ‘AVM’ which if acceptable can offer good savings on valuation fees.

    Legal Fees – You will have to instruct a solicitor to deal with the legal side of things, and most bridging lenders will want you to cover the cost of their legal fees also. Legal fees may be able to be deducted from the advance, although you might have to pay an initial amount to get started.

    Broker Fees – Some brokers might look to charge an arrangement fee for arranging the bridging loan for you, which could be a flat fee, or a percentage of the amount to be borrowed.

    We do not currently charge a broker fee for arranging bridging finance.

    What Are Automated Valuations?

    Automated valuations are a method of valuing a property using technology instead of a manual inspection. The technology uses various data points to generate a value, which helps speed the process up and eliminates or reduces the cost of valuing a property.

    It should be noted that while an automated valuation can help speed things up, it may not reflect the property’s actual value, which could then impact the loan to value and available borrowing.

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    Personal & Limited Company Funding

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    100% LTV With Additional Security

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    No Income Or Affordability Checks

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    Rolled Up, Retained Or Serviced Interest

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    No Early Exit Fees

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    Same Day Decision In Principle

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    We Can Also Arrange Exit Finance (BTL, Commercial)

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    First Time Buyers & Investors

    Call Us

    Call us on 01604 212879 and speak to a bridging finance expert

    Email Us

    If you would prefer to email and explain your situation in more detail, email us at:

    enquiry@adeptmortgages.co.uk

    Request a Call Back

    Use our call back form to request a call back and we’ll be in touch

    What else should I know about auction bridging?

    These are some other points to note when considering auction bridging finance:

    Your Exit Strategy

    The primary concern for bridging lenders is how they will get their money back, therefore you’ll need to have a viable strategy for how you will repay the loan, known as an exit strategy.

    Typically, an exit strategy will be one of the following:

    Sale of the property – the cleanest and easiest exit from the lender’s perspective. Typically this involves a purchase, refurbishment or conversion and then putting the property up for sale to realise a profit.

    Refinance – If the plan is to refinance a property onto a mortgage of some sort then the lender will likely want to see evidence of an agreement in principle confirming the exit is available. Its important to discuss refinance options before bidding on any property to ensure funding options are available to meet your requirements and ensure the bridging loan can be repaid in full.

    Get the best bridging rates from the leading lenders

    We compare bridging rates from the UK’s leading lenders, finding the best terms, to enable you to achieve your property goals.

    We can help with:

    • Unregulated and Regulated Bridging Loans
    • Rolled up, retained and serviced interest bridging loans
    • Purchase and refinance
    • Funds for refurbishment works
    • 1st & 2nd charge bridging loans
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    Expert Advice - Zero Broker Fees

    We’ll never charge a fee for our services, including our initial advice and mortgage arrangements.

    Speak To A Bridging Finance Expert

    Call us on 01604 212879 or request a call back

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    If you'd like to keep updated with latest rates and developments

    Explore Bridging Finance

    Find out more about Bridge-to-Let Finance

    For chain breaks, explore Regulated Bridging Loans

    For new developments and conversions, find out more about Development Finance

    A small selection of some of our Bridging Finance lenders

    We source our bridging loans from a wide range of bridging lenders, some of who you can find more information on from the list below.