The hammer falls. You have 28 days.
Auction finance built around the deadline that actually matters. Lender backed terms within 24 hours so you know your maximum bid before you raise your hand, and a completion process designed to land inside 28 days rather than hope for it. £100k to £25m across the UK and Europe, every property type, every sector.
By Dominic Whitecross, Co-Founder, HyLend. Last reviewed July 2026.
What is auction finance?
Auction finance is a bridging loan arranged specifically to meet an auction completion deadline. In England and Wales, a traditional auction contract is formed on the fall of the hammer: you exchange there and then, pay a deposit of typically 10%, and are contractually bound to complete, usually within 28 days. No mainstream mortgage process reliably moves at that speed, which is why almost every leveraged auction purchase is funded by a bridge and then refinanced or sold afterwards.
The product is ordinary bridging. What makes auction finance distinct is the sequencing. Everything that would normally happen at a relaxed pace, valuation, legal review, lender credit approval, has to be compressed into four weeks, and the penalty for missing is not inconvenience but forfeiture of your deposit. The work that decides whether you complete is therefore done before you bid, not after.
What auction finance is used for
- Unmortgageable stock. No kitchen or bathroom, structural defects, short leases, missing building regulations sign off. A term lender declines; a bridging lender prices the exit.
- Below market value purchases. Where the discount is the whole point of buying at auction and speed is what secures it.
- Refurbishment projects. Buy, improve, then refinance onto a buy to let or commercial term facility, or sell.
- Commercial and mixed use lots. Shops with flats above, offices, industrial units, care homes, pubs and hotels.
- Land and development sites. With or without planning, priced accordingly.
The mistake that costs people their deposit
Bidding first and arranging finance afterwards. It sounds obvious written down, and it remains the single most common way auction buyers lose money. The 28 day clock starts the moment the hammer falls, and it does not pause because your valuer is booked up, because the legal pack revealed a title defect, or because your lender wants a further two weeks. Get indicative terms and a solicitor briefed on the legal pack before the auction, and the deadline becomes a formality rather than a risk.
The 28 day timeline, in practice
Here is how a completion that lands comfortably actually runs. Note how much of it happens before auction day.
| When | What happens | Who |
|---|---|---|
| Before the auction | Legal pack reviewed, indicative terms issued, maximum bid set with finance costs included | You, your solicitor, us |
| Auction day | Contract exchanges on the fall of the hammer. Deposit paid, usually 10% | You |
| Days 1 to 2 | Full application submitted, valuation instructed, solicitors formally instructed both sides | Us |
| Days 3 to 10 | Valuation inspection and report returned | Valuer |
| Days 7 to 18 | Legal due diligence, title and searches, lender credit approval, formal offer issued | Lender, solicitors |
| Days 18 to 25 | Conditions satisfied, report on title, funds requested | Solicitors |
| By day 28 | Completion. Balance paid, security registered | Everyone |
Indicative sequence for a first charge purchase with a clean legal pack, July 2026. Complex title, leasehold consents or commercial tenancies extend the legal stage.
The two levers that genuinely change this timeline are valuation turnaround and solicitor responsiveness. Instructing solicitors on the day of the auction rather than three days later regularly saves a week, and it costs nothing to do.
Buying at a modern method auction instead?
The modern method of auction works differently. You pay a non refundable reservation fee, and typically have 56 days rather than 28, split into a reservation period and a completion period. The timeline is gentler, but the reservation fee is at risk from day one and is often a percentage of the price rather than a flat sum.
Both routes are fundable. Tell us which you are buying under and we will price to the correct deadline: model your figures →
What auction finance costs
Auction bridging is priced as standard bridging. There is no separate auction premium, though a short term and a difficult asset both push pricing up in the normal way.
| Cost line | Typical range | Notes |
|---|---|---|
| Monthly interest rate | from 0.69% pm | Driven by LTV, asset type and exit strength |
| Lender arrangement fee | around 2% of gross loan | Usually added to the loan |
| Valuation | £500 to £3,000+ | Expedited inspections sometimes carry a premium |
| Legal costs | £1,500 to £5,000+ | You cover both sides' solicitors |
| Auction house buyer's fee | Varies by auction house | Payable to the auctioneer, not the lender. Check the conditions |
| Exit / admin fee | £0 to 1% | Lender specific; we flag it up front |
Indicative ranges based on current whole of market pricing, July 2026. Second charge, land and commercial assets price higher.
A worked example
You win a lot at £300,000 against a valuation of £340,000. You plan a light refurbishment and a refinance onto a buy to let mortgage at month nine.
- Lender advances against the lower of price and valuation, so 70% of £300,000 gives a gross loan of £210,000.
- You fund the remaining £90,000 plus fees from cash or equity elsewhere.
- Interest retained for the term, arrangement fee added to the loan, valuation and legals paid separately.
- Exit at month nine by refinancing against the improved value, repaying the bridge and its retained interest.
Whether that is good value depends on one thing: what the auction route bought you. A £40,000 discount against open market value comfortably covers the cost of a nine month bridge. A purchase at full market value with no uplift plan does not.
The point most borrowers miss: lenders generally advance against the lower of purchase price and valuation for the first six months of ownership. Buying £40,000 below market value does not usually give you a bigger loan on day one. It gives you a better refinance in six months. Plan your cash accordingly. Some lenders will lend against open market value where the discount is genuinely evidenced, and that is exactly the kind of point worth testing across the whole market rather than assuming.
Price it before you bid
Our calculator shows the gross loan, rate, LTV and full redemption figure on your numbers, with retained and serviced interest side by side. No email gate, no contact details, no callback.
Reading the legal pack before you bid
The legal pack is where auction deals are won and lost, and it is the part buyers most often skim. Your solicitor should review it before auction day, not after. From a funding perspective, these are the items that most frequently derail a bridge:
- Title defects. Missing title, restrictive covenants, absent rights of access. All fundable in principle, all slow, and slow is the enemy of a 28 day deadline.
- Short leases. Under roughly 70 years and the refinance exit narrows sharply. Lenders will want the extension plan.
- Tenancies in occupation. A regulated or protected tenancy materially changes value and lender appetite. Vacant possession is not a given.
- Missing building regulations or planning consents. Common on unmortgageable stock, and central to how you make the property mortgageable again.
- Special conditions shortening the deadline. Some lots complete in 14 days rather than 28. This is buried in the special conditions and it changes everything about your funding plan.
- Buyer's fees and contributions. The seller's legal costs, search fees and auctioneer's administration fee are frequently passed to the buyer.
Send us the legal pack alongside your enquiry. We would far rather flag a problem before you bid than explain one afterwards.
Scottish auctions work differently
If you are buying in Scotland, several assumptions from English auctions do not carry across, and they affect funding directly.
The paperwork, not the hammer, forms the contract. Scots law requires a subscribed writing for any contract creating a real right in land, so a Scottish auction, a roup, has the successful bidder immediately sign a Minute of Preference and Enactment at the auction. Commercially the effect is the same as an English exchange. Legally the document, not the hammer, is what binds.
The deadline is often shorter than 28 days. Twenty eight days from the auction is the common default where the special conditions are silent, but Scottish legal packs frequently specify 14 days. Check before you bid.
Risk can pass on signature rather than at entry. Several Scottish auction houses' conditions pass risk to the buyer when the minute is signed, which is the opposite of the normal Scottish position. Buildings insurance needs to be in place from auction day, with the lender's interest noted.
The usual conveyancing safety nets are often excluded. Auction conditions commonly disapply advance notices and letters of obligation. Since a Scottish standard security is not created until it is registered in the Land Register, that gap matters to a lender and is worth raising early.
Some liabilities transfer with the property. Statutory notices, charging orders for common repairs and notices of potential liability can pass to the buyer. Tenement flats in Glasgow and Edinburgh are the classic case, where a registered common repair liability survives the sale.
Failure to settle is more serious. Alongside interest and forfeiture, a Scottish seller has a primary right of specific implement, so a court can order you to complete rather than simply award damages.
General information on Scottish auction practice as at July 2026, not legal advice. Terms vary by auction house and every legal pack must be read on its own terms by a Scottish qualified solicitor.
What lenders look at on an auction deal
The exit, first and always. Sale exits need realistic pricing evidence, not optimism. Refinance exits need a credible case that the take out lender will actually be there at the value you are assuming.
The asset. First charge residential and semi commercial gets the best pricing at up to 75% LTV. Land, commercial and second charges are all fundable at lower leverage.
The refurbishment plan, where there is one. Scope, costed schedule of works, and whether the works are light cosmetic or structural. Heavy refurbishment moves the deal towards a development style facility with staged drawdowns.
Your experience. It matters more on refurbishment and conversion than on a straight buy and hold. A first project is fundable; it just needs to be presented properly.
We test every auction deal against the whole market rather than a fixed panel, across every sector and property type, throughout the UK and Europe.
The valuation is usually what costs you the 28 days
Auction timelines are rarely lost in underwriting. They are lost waiting for a valuer to get access and then waiting for the report. A physical residential inspection takes three to ten working days to book and produce; an automated or desktop valuation takes minutes to 72 hours. On a 28 day deadline that difference is often the entire margin of safety.
Leading bridging lenders now run automated valuations on residential security up to around 75% loan to value and up to £1m of loan, and the share of cases valued this way is rising sharply through 2026. Establishing whether your lot qualifies is something to do before you bid, not after the hammer falls. Desktop and AVM valuations →
Remember too that the lender advances against valuation, not against the hammer price, and on commercial or unusual lots it may size against a restricted marketing period figure lower than market value. 90 and 180 day valuations explained →
Testing the 28 days before you bid
The 28 day deadline is achievable as a matter of routine, and ten to fourteen days is possible where the legal pack is clean. What decides it is whether the lender will accept an automated or desktop valuation on the lot, and whether your solicitor is instructed before the hammer falls rather than after. Desktop and AVM valuations →
If you want to test a specific lot against a specific date before committing, the deadline checker walks through it in four questions. Check whether your deadline is realistic →
Auction finance FAQs
How quickly can auction finance complete?
A well prepared auction bridge completes inside the standard 28 day deadline as a matter of routine, and can complete in 10 to 14 days where the legal pack is clean and solicitors are instructed immediately. The two variables that decide it are valuation turnaround and how fast your solicitor works through the legal pack, so both should be lined up before the hammer falls rather than after.
Can I get auction finance approved before I bid?
Yes, and you should. We issue lender backed indicative terms within 24 hours, which lets you set your maximum bid knowing exactly what the finance costs and what the lender will advance. Bidding first and arranging finance afterwards is how buyers lose deposits, because the 28 day clock starts on the fall of the hammer whether your funding is ready or not.
What happens if I cannot complete in 28 days?
In England and Wales you are contractually bound from the fall of the hammer. Failure to complete typically means forfeiting your 10% deposit, paying interest on the balance at the rate set in the conditions, and exposure to the seller's costs and any shortfall if the property is resold for less. In Scotland the seller also has a primary right of specific implement, meaning a court can order you to perform rather than simply awarding damages.
How much deposit do I need for an auction purchase?
Auction houses typically require 10% on the day, subject to a minimum, plus a buyer's administration fee. Separately, the lender will usually advance up to 75% loan to value on first charge residential or semi commercial, so you need to fund the remaining equity plus fees. Note that lenders lend against valuation, not the hammer price, which matters when you buy below market value.
Will a lender lend against the hammer price or the valuation?
Most lenders advance against the lower of the purchase price and the valuation for the first six months of ownership. If you buy at £300,000 and the property values at £400,000, expect the loan to be calculated on £300,000 rather than the higher figure. Some lenders will lend against the open market value where the discount is clearly evidenced, which is one of the specific points worth testing across the whole market before you bid.
Can I use auction finance for an unmortgageable property?
Yes. Properties without a kitchen or bathroom, with short leases, structural defects or no valid building regulations sign off are common auction lots and are exactly what bridging exists for. A conventional mortgage lender will decline them; a bridging lender underwrites the asset and the exit, so the plan to make the property mortgageable is the part that matters.
Do Scottish auctions work the same way?
Broadly, but with important differences. Scottish auctions are a roup, where the successful bidder immediately signs a Minute of Preference and Enactment rather than relying on the hammer alone, and the standard date of entry is 28 days unless the special conditions specify shorter, which they frequently do. Risk commonly passes on signature rather than at the date of entry, so buildings insurance must be in place from auction day, and the usual Scottish conveyancing protections such as advance notices are often contractually excluded.
Can I fund the deposit as well as the balance?
The 10% auction deposit is paid on the day from your own funds, so it needs to be available before you bid. Where you have equity in other property, a second charge or cross charge arranged in advance can provide it. That has to be set up beforehand, not on auction day.