Mortgage guide
Are Auction Loans regulated?
Read about the regulatory considerations for land bridging loans used for auction purchases.
- Published
- 13 Apr 2026
- Last reviewed
- 8 Oct 2026
- Reading time
- 2 min
Are Auction Loans regulated?
When considering land bridging loans, particularly for auction purchases, it’s crucial to be aware that these loans are typically not protected by the Financial Services Compensation Scheme (FSCS). This lack of coverage applies unless the borrower intends to reside in the property. Therefore, borrowers using land bridging loans for investment purposes should be especially diligent in selecting a reputable lender.
Land bridging loans used for investment, as opposed to residential purposes, generally do not fall under the protection of the FSCS. This means that the safety net provided by the FSCS for other financial products may not be available.
Due to the absence of FSCS coverage, the importance of working with a credible and trustworthy lender cannot be overstated. It’s essential to ensure that the lender has a solid track record and a strong reputation in the market.
Borrowers should conduct thorough research and due diligence when selecting a lender for a land bridging loan. This includes checking the lender’s history, reading reviews, and possibly seeking recommendations from trusted financial advisors.
At Mortgage Lane, we prioritise the safety and satisfaction of our clients. We guide our borrowers in choosing reputable lenders for land bridging loans, providing them with the necessary information and support to make informed decisions. This approach is especially important in the auction loan market, where the right lender choice can significantly impact the success of your investment.
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Land 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, Ltd co, LLP, Trusts, Offshore Trusts |
| Repayment type | Interest only |
| Max Loan to Value (LTV) | 65% max |
| Term | Max 36 months |
| Minimum loan | £40,000 |
| Experience | Not required |
| Max applicants | 6 |
| Uses | Agricultural land, business use, self build, pre-planning |
Published indicative terms for the wider product category are shown for context. They are not a quote for the specific circumstances discussed in this guide.
| 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) |
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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.
Can you sell a house at auction with a mortgage?
Yes. You can sell a mortgaged property at auction provided the outstanding mortgage is repaid from the completion proceeds. Your solicitor will redeem the lender’s charge, and early repayment charges may apply depending on your mortgage terms.
Can I flip a house bought at auction?
Auction purchases can suit a flip where the price, condition and costs leave a margin. A bridge may meet the completion deadline, often 28 days, but the auction contract determines the actual deadline. The legal pack and the property's condition are reviewed before bidding.
Can you borrow money for an auction property?
Yes, you can borrow money for an auction property, most commonly using a bridging loan or bridge-to-let mortgage. Traditional auctions require completion within 28 days, which bridging finance is designed to meet. For modern auctions offering up to 56 days, a mortgage may be possible, but bridging remains the most reliable option.
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.
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