Auction Finance London
Funding from £75,000 up to £25 million
Helping you secure a short-term financial solution to your specific auction finance London requirements
Auction Finance London
Auction finance plays a vital role in London’s fast-paced and competitive property market, where demand for residential, commercial, and mixed-use properties is exceptionally high. London property auctions often feature prime real estate, redevelopment opportunities, and properties with complex titles or planning issues. These types of assets attract investors, developers, and landlords looking to add value through refurbishment or redevelopment.
The high prices and rapid sales typical of London auctions mean buyers must act quickly. Winning bidders are required to pay a 10% deposit on the day of the auction and complete the purchase within 28 days, which can be challenging given the speed at which London properties move. Auction finance, most commonly provided through specialist bridging loans, offers a practical solution by delivering funds within days, allowing investors to secure valuable assets without missing deadlines.
The scale of property values in London adds another layer of complexity. Even modest homes can command prices well above the national average, so lenders offering auction finance in the city must be comfortable working with high-value transactions. Many will lend up to 70–75% of the property’s purchase price, and some will also consider the “gross development value” (GDV) the projected value after refurbishment or redevelopment. This makes auction finance particularly appealing for developers looking to add significant value to London properties through extensions, conversions, or full-scale redevelopment projects.
In London, many lenders are familiar with the local market and can tailor their products to meet the unique demands of high-value properties. They often take into account not only the current value of a property but also its potential value after refurbishment or planning approval. This makes auction finance particularly attractive for those targeting the capital’s lucrative redevelopment and buy-to-let opportunities.
Types of London Auction Finance Clients
Homeowners
Commercial & Residential Landlords
Buy to Let Investors
Business Owners
Property Developers
Company CEO’s
Auction Finance in London
Auction Finance For Your London Property
There can be a few hurdles to jump when buying a London property at auction. It is therefore important to make sure your finances are in place before making a bid. Mark Thomas of Bridging Finance Now can walk you through this process to ensure your auction purchase completes successfully and on time.
London’s property market is one of the most dynamic and competitive in the world, with opportunities ranging from luxury apartments in Mayfair to redevelopment projects in emerging areas such as Hackney, Peckham, and Stratford. Property auctions in the capital have grown significantly in popularity as a way for investors, developers, and even first-time buyers to purchase properties below market value or acquire unique assets that may not be available through traditional sales channels. However, the speed and structure of auction purchases present unique financial challenges, which is where auction finance comes into play.
Unlike private treaty sales, where transactions can take months to complete, auction purchases operate on strict deadlines. When the gavel falls, the winning bidder is legally committed to the purchase, usually paying a 10% deposit immediately. The balance is typically due within 28 days. In a market like London, where property values are high and competition fierce, this tight timescale often rules out traditional mortgage financing, which can take several weeks or even months to arrange. Auction finance provides a fast and flexible solution, enabling buyers to meet these deadlines and secure properties without delays.
Auction finance in London is commonly structured as a bridging loan, a type of short-term borrowing designed to “bridge the gap” until longer-term financing or a sale can be arranged. These loans are particularly well-suited to London auctions because they can be processed in a matter of days, making them ideal for situations where speed is essential. Many specialist lenders in the capital have dedicated auction finance products and even work directly with auction houses, such as Savills, Allsop, and Barnard Marcus, to streamline the funding process.
One of the defining features of the London auction market is the variety of properties available. Many auctioned properties in the city are unconventional or require refurbishment, such as ex-local authority flats, unmodernised Victorian houses, or commercial units with development potential. Traditional mortgage lenders are often reluctant to finance these types of properties, especially if they lack a functioning kitchen or bathroom. Auction finance fills this gap by funding properties that are “unmortgageable” in their current state. Once renovations or legal issues are resolved, buyers can refinance onto a standard mortgage or sell the property, repaying the bridging loan.
The speed and flexibility of auction finance come at a cost. Interest rates are typically higher than those of standard mortgages, and there are often arrangement fees and exit charges to consider. Given London’s expensive market, these costs can be substantial, so investors need a clear financial strategy. Most successful buyers have a defined exit plan before taking out auction finance, whether that involves refinancing with a traditional mortgage, selling the property post-refurbishment, or using rental income to support a long-term investment strategy.