Auction Finance

At LoanX, we pride ourselves on securing the best possible auction finance for your business.

SINCE 2004




Auction finance in its simplest sense is a form of quickly-obtained, short-term finance. You may also have heard this type of short-term finance referred to as ‘bridging loans.’ What this means then is that auction finance is a form of money that is intended to be used for a short period and which can also be accessed quickly – and which is exactly what is required when you spot a property bargain at auction.


That’s because, when it comes to buying either a residential or commercial property at auction, you have to act fast. Not only do you have to be able to put down a deposit, but the balance of the property must also be paid to the auction house by the end of the month.  Rather than wait months to get your loan paperwork processed for a longer loan with a bank or lender, with auction finance the bidder can often find his or her funding approved with seven to 10 days of their application.




  • Monthly interest rates from 0.44%
  • 100% of purchase price (up to 75% LTV)
  • Up to 75% LTV for residential properties
  • Up to 70% LTV for commercial properties
  • Up to 68% net loan for refurbishment
  • Land with planning up to 70% LTV
  • Overseas residents welcome
  • First or second charge loans
  • No monthly loan repayments
  • No proof of income
  • Interest deducted from the loan
  • Loans from £100k – no upper loan size.
  • Discharged bankrupts welcome
  • Overseas residents welcome
  • Bridging loans from 1-24 months
  • Loan amount based on full open market value
  • All types of credit history welcome, including with defaults/CCJs
  • England, Scotland, Wales & Ireland (ROI + NI)
  • Other European locations also available.
  • Loans to individuals, Ltd Co’s, LLP’s, SIPP


At LoanX, we have a deep understanding of the market and the finance options that are available, whether for auction purchases or property development, bridging finance is available for nearly all types of property, including:

  • Residential assets, including HMO’s and Buy to Let.
  • Refurbishment loans, both for acquisition and to fund renovation work.
  • Retail premises
  • Land – usually with some form of planning consent.
  • Industrial
  • Offices
  • Hotels & B&B’s
  • Houses of multiple occupations (HMO)
  • Pubs
  • PBSA
  • Student accommodation
  • Restaurants
  • PRS sector
  • Farms
  • Permitted Development (PD)
  • Mixed use properties
  • Nursing/Care homes
  • Petrol Stations
  • Golf courses


If the bridging loan is not for investment purposes, then it will be classed as a “regulated bridge loan” ie. a loan secured by a homeowner on their current home or future home, therefore regulated by the Financial Conduct Authority.

These loans are commonly used to “bridge the gap” on the purchase of a new property.

Where can i obtain auction finance?


Property auction finance is usually provided by a specialist lender. There are a small number of these companies based in the UK, and it is worth shopping round to get the best interest rates and deals. Just make sure they are regulated by the Financial Conduct Authority.

Auction Finance at a Glance

  • Secure short term finance over 1-12 months
  • Loan to value up to 70%
  • Auction finance funding for commercial property acquisition or land purchase
  • Auction finance funding for residential investment
  • Monthly interest rates from 0.70%
  • Funding for non standard property construction


You don’t have to be in full-time employment to receive auction finance. It’s possible to make an auction purchases when you are self-employed, a sole trader, in a partnership, on behalf of a limited company or for a limited liability partnership.



  1. The amount of bridging finance available that you can benefit from depends on the value of the property you plan to buy at auction and whether or not the lender believes you will be able to pay him or her back. In such circumstances, you should also have a well-definite exit route. It’s not usual for loans to start at £25,000 and continue right up as far as the lender is willing to go. In addition, many are 100 percent loan to value.


  1. Interest rates on auction finance and a bridging loans will vary but, because of the convenience of obtaining a bridging loan at such short notice, the interest rate will be higher than that that paid for a standard loan. However, the fact the terms of the loan aren’t long, the interest payments shouldn’t be excessive anyhow. It’s also possible to reduce the interest rate by re-financing after a certain period (at least six months minimum). Remember too that the funding will probably be based on 100 per cent loan to value – something you definitely won’t find on the High Street today.




Residential property

The type of buildings that bidders are usually interested in property auctions tend to be old, run-down and in many cases dilapidated. That’s because many of these are repossessions. In some cases, they may have been empty for years, in other cases, just months. Many property developers are interested in buying at auction because the vast majority of auction property requires refurbishment. The plan is to buy cheaply, refurbish and sell on for a profit. Some portfolio landlords prefer to tenant the property ie rent it out for monthly income. They use auction finance rather than buy to let because if they went for the latter they wouldn’t be able to grab their bargain property. That’s because a buy to let mortgage can take up to six weeks to arrange. It can be even longer when the property market is in full-swing as it is at this moment in time.

You can find both residential and commercial properties at auction. There are often mixed-use developments too. This could, for instance, mean a shop with a flat above. Sometimes land for building on is sold at auction too.



commercial property

You will often find pubs up for sale at auction, as well as restaurants, offices and shapes. It’s much easier these days to change the use of these into residential property after the government’s ruling last year ……. This is in a bid to save the UKs high streets from becoming ghost towns, but also to provide much-needed additional housing in this country. Warehouses too are sold at auction – though to a lesser extent. 


Whether you will be charged a fee for organising a short-term loan depends on the company. Many auction finance lenders are happy to pay legal fees for the loan and some are willing to waive exit fees as well. You will, however, be expected to have your own solicitor for other matters, such as checking over documents for you and making an offer on a property etc.


Speedy decision-making

You should get a decision in principle within 24 hours. Following that you will quickly receive terms in full for the loan from the majority of financial conduct authority-regulated specialist lending companies.

Quick take-up

Once your loan is accepted you can also expect to receive it quickly – in around seven to 10 days maximum. You can then carry on with your auction purchase.

A personal service

Unlike large impersonal bands or building societies, most specialist auction finance lending companies are small, often with only a handful of staff. This means customers have the opportunity to become familiar with finance auction staff and vice versa. It also means you will have the one individual to see you through from the minute you apply for the loan to its appearing in your bank statement.

A tailored service

Your loan will be tailored to what you need with its length and interest terms based on what is best for your own individual circumstances. Specialist borrowing such as auction finance doesn’t lend itself to the typical high street ‘one size fits all’ solution. Because we all know that simply isn’t the case.

No major credit stipulations

The loan you want to allow you to buy a property at auction will be secured against the value of that very property you intend to buy. In some cases it may be secured against other assets you have. Because of this there is no need for the lender to undertake a rigorous approval process such as a credit history check or insist on yearly business plans and lengthy cash flow forecasts.


You don’t actually have to arrange the loan prior to auction. Because of the speed of acceptance and receipt it can be organised after you have made a successful bid for the target property you want at auction. The main point is to have the loan prior to completion of the purchase (usually a month after the purchase date).


Property being sold for auction is often at bargain prices. It’s not on the market as the seller is often after a quick sale. That could be because it is a bank wishing to retrieve its money quickly from the property or it could be the property has been inherited and, again, the seller wants to move on quickly. Another reason – one we have already touched on – is that the property is so badly in need of repair that most ‘normal’ buyers wouldn’t touch it. As a result it is actively being sold as a refurb property to builders and property investors who can always profit from such property potential.

And, on the subject of refurb properties, it’s worth pointing out here too that the majority of high street lending companies won’t provide a mortgage for a run-down and dilapidated property.


Auction purchases in the UK usually involve a standard procedure that all auction houses have to adhere to in order to remain within the law. The main points are:

Payment within 28 days

Once a property has been bought the successful bidder will be asked to put down a 10 per cent deposit. He or she will then have 28 days to come up with the remaining 90 per cent of the cash for the value the property sold at auction.

Properties listed in auction catalogue

You can go and see properties in advance of the auction by checking the auction houses catalogue where all properties should be listed. This gives you time to undertake due diligence. You can, for instance, find out how much it will cost to refurbish the property, what the area is like, and the cost of other properties there. That should let you know if it can turn into a profitable purchase or not.

Legal packs available

Properties for sale at auction should have a legal pack. This confirms that the property is legally entitled to be sold. There are occasions when your solicitor may have to request this from the auction house as it isn’t always presented along with the catalogue description.

Guide price isn’t reserve price

The guide price of a property at auction is simply the starting price. The property you like could go for much higher – or even lower – than that. If the sellers has put a reserve price on the building then this is the minimum he or she is willing to accept. It’s not unusual for the reserve price to be as much as 10 per cent higher than the guide price.

T & C’s of sale

Once that gavel goes down on your bid, you have bought the property. At the end of the auction you will be expected to pay the deposit and sign a contract agreeing to the rest of the payment schedule. Changing your mind about the property after this point could prove expensive as you’ll be expected to pay the seller’s costs for re-advertising at auction, as well as their legal fees. Also, you probably won’t get your deposit back.

Private auction sale

If, at the end of an auction a property is left unsold then by registering your interest with the auctioneer you may be able to get a private sale at the end of the event, using the same auction finance.

Auction fees to pay

Both the buyer and seller has to pay fees when a house or commercial property changes hands during auction. For the buyer this is often referred to as an admin fee. There is to stated price for this, it varies depending on where the property is sold. It’s worth remembering as it can be quite a chunk – up to £1000 in some cases or a percentage of the purchase price.


So, where will you spend your auction finance once you’ve obtained it? There are plenty of property auction houses throughout the UK. Just make sure whichever one you choose to buy at is regulated by a trustworthy organisation such as NAVA property mark.

Most traditional auction houses these days also offer an online facility where it’s possible to register a bid live online at the auction website. This opens up the room to further competition, of course, so it’s not always possible to get the same kind of bargain as you would at a traditional set-up with your auction finance.

There are websites which aggregate the majority of property auctions taking place, and where. Some of the large estate agents such as Savills and Countrywide hold property auctions while you can also look online at a website such as Zoopla or Rightmove. There are also a number of dedicated auction houses which will send out brochures featuring forthcoming properties for auction, as well as emails on dates and places if you sign up to their newsletter.

For more information on how auction finance works and how to obtain it take a look at the appropriate page on our website today.