Bridging finance for auction property

Fast tracks to completing under the hammer

Auction rooms have roared back to life. Lots offered rose 8.7% in 2023, with 2,136 sales raising £380.8 million. Commercial activity surged and online auctions jumped 35% year on year. In this environment, speed is strategy. Bids are binding and completion deadlines are typically 28 days. Traditional mortgages can lag; bridging finance is designed to keep pace.

Rates have sharpened. Monthly bridging pricing has dipped to around 0.81% in a competitive market, helped by stable base rates and lower average loan-to-values. Applications rose 11% year on year while gross lending stayed steady, a sign of resilience rather than overheating. Processing has accelerated too. Average completion from offer has been reported at 43 days, with some quarters hitting a record 32 days. For auction buyers, that speed can be decisive.

This is not a niche tool. More than half of bridging is regulated for residential use, with the balance supporting investments such as HMOs, light refurbishments, and conversions. Loan books reached a record £9.01 billion in 2024, and 72% of brokers expect further growth. Lenders have responded with tighter stress testing, retentions, and a stronger focus on exits via sale or remortgage, helping borrowers navigate shifting valuations.

The winning bid is only the beginning - bridging helps you finish the deal on time.

Understanding the costs, the risks, and the route from hammer fall to exit is essential. Below, we set out who bridging suits, the options available, what it might cost, and how to proceed with confidence.

Is this you?

If you are buying a property at auction in the UK and need to complete quickly, bridging can be a practical, flexible option. It also suits buyers facing chain breaks, those refurbishing before refinancing, and investors acquiring below-market-value stock where time is critical. Homeowners, landlords, and small businesses use bridging to secure properties that would be missed if they waited for a standard mortgage. Even as parts of the market cool, specialist lenders report rising demand for auction finance, reflecting ongoing confidence in fast, targeted purchases.

Ways to structure your funding

1. Regulated bridging - for residential properties you or family will occupy, typically up to 12 months.

2. Unregulated bridging - for investment or commercial assets, often used for HMOs and semi-commercial.

3. Light refurbishment bridge - finances purchase plus minor works to reach mortgageable condition.

4. Heavy refurbishment bridge - funds structural changes with staged drawdowns and monitoring.

5. Auction pre-approval - indicative terms secured before bidding to strengthen confidence.

6. Bridge-to-let or bridge-to-sell - clear exit planned via remortgage onto a buy-to-let or sale.

What it could mean for your wallet

Who qualifies and what lenders look for

Eligibility is pragmatic, centred on security, borrower profile, and a credible exit. Lenders assess the property’s value and condition, the purchase price relative to market comparables, and whether works are required before the asset becomes mortgageable. They review income, credit conduct, and experience for investment cases, while accepting that some scenarios are time pressured. A realistic exit is critical, typically a sale or remortgage once the property is improved or the marketable condition is achieved.

Expect stress testing for valuation downside, possible retentions for works, and contingency planning including re-bridge options if timelines slip. Regulated cases add consumer protections and affordability checks. Unregulated cases focus on asset strength and borrower track record. Kandoo works with a panel of UK lenders across residential and investment needs, helping align loan size, term, and structure to your auction timeline and budget.

From hammer fall to funds - the steps

1. Get indicative terms and maximum bid confirmed.

2. Win the lot and pay the deposit immediately.

3. Instruct valuation and legal due diligence early.

4. Finalise underwriting and evidence your exit plan.

5. Agree any retentions or works schedule with lender.

6. Draw down funds and complete within the deadline.

Weighing it up quickly

Read this before you sign

Fallen-through transactions cost UK buyers over £275 million in a single quarter, often due to chains or delays. Bridging can stabilise a purchase, but only if you manage risk on day one. Know your maximum bid, build in a buffer for fees and overruns, and have a Plan B if sale or remortgage is delayed. Scrutinise special conditions in the legal pack and clarify any title or planning issues that could derail a refinance. If your works are essential to achieve mortgageable condition, time them tightly and keep contractors accountable. Next steps: obtain an agreement in principle before bidding and line up solicitors experienced in auction timelines.

If bridging is not quite right

1. Specialist auction mortgage - slower than bridging, but cheaper if timelines allow.

2. Cash with later refinance - fastest completion, then remortgage to release funds.

3. Joint venture or private finance - partner provides capital for a profit share.

4. Second charge loan - raise against another property to fund the purchase.

5. Development finance - larger works with staged drawdowns and monitoring.

Common questions

Q: How fast can I complete with a bridge? A: Many cases finish in 32 to 43 days. Start valuation and legals immediately and choose solicitors who understand auction deadlines.

Q: What rate should I expect? A: Competitive cases can see around 0.64% to 0.81% monthly. Your LTV, property type, and experience will influence pricing.

Q: Is a 28-day deadline realistic? A: Yes, with preparation. Pre-approval, early searches, and swift document delivery are essential. Some sellers allow short extensions where evidence of funds is clear.

Q: What if my exit is delayed? A: Build a buffer, consider re-bridge options, or extend if available. Lenders increasingly stress test exits and may retain funds until milestones are met.

Q: Can I use bridging for HMOs or refurbs? A: Yes. Unregulated bridging is widely used for HMOs, conversions, and light to heavy refurbishments with staged funding.

Q: Are approvals tightening? A: Lenders are cautious on valuations but liquidity is strong and application volumes are rising, including for auctions, despite a cooler wider market.

How Kandoo helps you win the lot

Kandoo is a UK retail finance broker with access to a wide panel of bridging lenders. We match your timeline, LTV, and exit strategy to the right product and manage valuation, legal, and underwriting in parallel to save days. Speak to us before you bid to set a confident maximum and move from hammer fall to completion on time.

Important information

This guide is for information only and does not constitute advice. Bridging finance is secured against property and your asset may be at risk if you do not keep up repayments. Terms depend on your circumstances and property status.