Mortgage guide
Auction bridging finance
Auction property loans need to fit the completion deadline in the auction contract. Read about the financial and legal preparation involved in arranging bridging finance.
- Published
- 4 Aug 2026
- Last reviewed
- 8 Oct 2026
- Reading time
- 3 min
Auction bridging finance
When purchasing properties at auction, understanding the specific financial products available, like auction property loans, is crucial due to the tight timelines involved. Auctions typically operate under two main formats: the traditional auction, which requires completion within 28 days, and the modern auction, allowing for a 56-day completion period. These accelerated timelines necessitate efficient financial and legal preparations to secure funding promptly.
Importance of Indemnity and Automated Valuations
For traditional auctions, where the 28-day timeframe can be particularly challenging, borrowers often benefit from lenders who accept full indemnity for legal searches. This approach can significantly speed up the legal process by bypassing some of the detailed searches that typically delay proceedings. For both traditional and modern auctions, using automated valuation models (AVMs) can expedite the property valuation process of a bridging loan. AVMs eliminate the need to schedule and wait for a physical inspection, thus reducing the overall time from application to loan approval.
Loan to Value (LTV) Explained
Loan to Value (LTV) is a critical factor in auction property loans, representing the ratio of the loan amount to the actual value of the property being purchased. Typically, unless borrowers have extra security lenders offer LTV ratios up to 75%-85% for auction properties, which means the borrower must provide at least 15-25% of the property’s price as a down payment. Higher LTVs might be available, but they often come with higher interest rates or additional lending criteria.
Key Considerations for Auction Property Loans
- Speed: Lenders specialising in auction property loans understand the need for quick decision-making and offer expedited processing to meet auction deadlines.
- Indemnity Acceptance: Choosing lenders that accept full indemnity can avoid delays caused by traditional property searches, making it feasible to meet the 28-day deadline in traditional auctions.
- Automated Valuations: Opting for lenders that use AVMs can further reduce the time taken for loan processing, ensuring funds are available swiftly to complete the auction purchase.
Bridging calculator
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Bridging Loan Criteria
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Criteria | Detail |
|---|---|
| Borrowers | Personal, limited company (Ltd co), LLP and offshore trusts, depending on the lender |
| Repayment type | Interest only or repayment |
| Term | Short term. The maximum term varies by lender; in our experience the minimum term is usually 1 month, and 3 months with some lenders |
| Experience | Not always required; it depends on the lender and the exit |
| Max applicants | Varies by lender |
| Valuation types | Automated valuation (AVM), Market Value 1 (MV1) yield based, market value (MV), 180-day or 90-day value, depending on the lender and how it labels the valuation basis |
| Regulated and unregulated | Yes, both: regulated where the borrower or a close family member lives, or will live, in the property |
| Credit searched | Usually, depending on the lender |
| Credit scored | Varies by lender; the decision rests mainly on the property and the exit |
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Loan to value | Rate |
|---|---|
| 65% LTV | 0.62% per month (2% lender fee) |
| 75% LTV | 0.72% per month (2% lender fee) |
| 85% LTV | 0.9% per month (2% lender fee) |
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Feature | Detail |
|---|---|
| Additional Security | 100%+ |
| Residential | 90% |
| Commercial | 75% |
| Land | 70% |
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Frequently asked questions
Can you get a bridging loan for auction property?
Yes, you can get a bridging loan for an auction property, and it is one of the most common uses of bridging finance. Bridging loans are designed to meet 28-day auction completion deadlines, providing fast funding for un-mortgageable, vacant, or complex properties, provided there is a clear exit strategy such as sale or refinance.
Are there any risks associated with bridging finance in London?
Yes. The main risks with bridging finance are timing, cost and the exit. If a sale or refinance is delayed, interest and fees increase. London market volatility, valuation risk and planning or legal delays can also affect the exit, so a clear, realistic repayment strategy is essential.
Can a bridging loan complete within 28 days for an auction?
Bridging loans can complete within an auction's 28-day deadline when the agreement in principle is in place and the legal pack has been reviewed before the auction, and the valuation and legal work start immediately after the hammer falls.
Can I get 100% bridging finance?
A bridge can sometimes fund 100% of a purchase price with additional security, or on a discounted purchase where the lender accepts a higher market valuation. The total debt must still fit the lender’s loan-to-value limits, and fees or retained interest can leave a cash contribution to pay.
What is closed bridging finance?
Closed bridging finance is a short-term bridging loan where the exit strategy is confirmed and time-defined from the outset. Repayment is tied to a known event, such as an exchanged property sale or approved refinance, which reduces lender risk and often results in lower interest rates than open bridging.
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