Bridging finance for cash-only auctions

Why bridging makes you a cash buyer

Property auctions reward certainty and speed. When the gavel falls, you exchange contracts and pay around a 10% deposit that day. Completion typically follows within 28 days for traditional rooms, with many online formats offering similar or slightly longer windows. Conventional mortgages rarely move quickly enough. Bridging finance fills that gap, providing short-term funding so you can act like a cash purchaser and complete within auction timeframes.

Bridging works by securing a loan against the property you are buying, another property you already own, or multiple assets together. That flexibility is powerful at auction. You can release tied-up equity without selling first, meet the completion deadline, and repay when your exit materialises. Common exits include refinancing onto a longer-term mortgage once works are finished, selling the asset after a refurb, or redeeming with cash from other disposals.

Many lenders allow interest to roll up with no monthly repayments. That means less strain on your cash flow while you focus on completing, carrying out works and arranging your exit. If you repay early, you typically only pay interest for the time you used the funds. For the right deal, lenders can fund up to 80% loan-to-value against the auction property alone, and up to 100% of the purchase price when you add extra security. Even fees and interest can be included in the loan, minimising upfront spend.

In a market where auctions are posting robust sales rates, cash-ready status is a competitive edge. Bridging gives you that edge without needing liquid cash reserves. It is fast, flexible and designed around the 28-day auction clock.

Speed wins at auction. Bridging finance delivers funds in days, not months.

Who benefits

Bridging for auction purchases suits UK buyers who need to move quickly and value flexibility. First-time investors can use it to enter the market without a large cash deposit when additional security is available. Experienced landlords and developers can scale portfolios efficiently, funding value-add projects that mainstream mortgages will not touch until works are completed. Businesses seeking commercial premises at auction can also leverage bridging to secure sites before rivals, then refinance once trading or refurbishment stabilises. Even where an existing mortgage is in place on another property, bridging can proceed if payments are up to date and sufficient security exists.

A standout use case is uninhabitable or non-standard stock. If the property lacks a working kitchen or bathroom, or construction is non-traditional, many high street mortgages decline. Bridging steps in so you can buy, fix and then exit to longer-term finance.

Your routes to auction-ready funds

1. Single-property bridging secured on the auction lot - up to 80% LTV.

2. 100% purchase bridging using additional security - no cash deposit required.

3. Refurb bridging with staged drawdowns - include up to 100% of works.

4. Commercial bridging for shops, offices and mixed-use - flexible criteria.

5. Portfolio cross-charge bridging - multiple properties to raise higher leverage.

6. Overseas buyer using UK security - purchase in Great Britain with domestic collateral.

Fast valuations are common. Automated desktop reports, often £0-£200, accelerate underwriting so you meet the deadline.

A simple rule of thumb: your exit must be realistic, evidenced and timed to the loan term.

What it could cost and what you stand to gain

Can you qualify?

Eligibility for auction bridging hinges on the asset, the security available and the plausibility of your exit. Lenders assess the property type, condition and location, then model the loan against the purchase price or value. If the auction lot is habitable and standard, funding against that single asset may reach up to 80% of value. If you can add extra security, such as another property with equity, total leverage can reach 100% of the purchase price and include fees and interest.

Your credit profile still matters, but many lenders take a pragmatic view for short-term loans. Adverse history is not necessarily a deal breaker if the numbers stack up and the exit is credible. There are usually no strict upper age limits, and proof of income can be lighter than on mortgages. Existing mortgages on other properties are not a barrier provided payments are up to date and those assets can support the overall structure.

Kandoo works with specialist UK lenders comfortable with auction timeframes, non-standard construction, and properties needing renovation. If your plan is to refurbish, your facility can include 100% of works with staged releases once milestones are met. For commercial or mixed-use lots, underwriting focuses on asset value and exit feasibility rather than traditional affordability tests.

From paddle to completion: the steps

1. Get decision in principle with your target budget.

2. Win the lot and pay the 10% deposit.

3. Provide documents, legal details and auction pack.

4. Valuation instructed - desktop or full inspection.

5. Final offer issued with rolled-up interest terms.

6. Solicitors complete searches and security paperwork.

7. Funds drawdown to complete within auction deadline.

8. Execute exit - refinance, sale or cash redemption.

Upsides and trade-offs

Pause for checks

Before committing, stress test your exit. If you plan to refinance, speak to a potential term lender early and confirm criteria around post-works value, rental coverage and property type. For a sale exit, consider realistic timescales, local demand and a contingency for price fluctuations. Review the auction legal pack closely and instruct a solicitor as soon as you bid. Check whether fees and interest are being rolled up and ensure you have headroom for overruns. If costs rise or the exit slips, your bridging term should be long enough to absorb delays. Finally, verify title, planning and any restrictions that could impede works or refinancing.

What else could work?

1. Term buy-to-let mortgage after refurb via a short licence-to-occupy.

2. Development finance for heavier works beyond light refurbishment.

3. Second charge loan on existing property to raise the deposit.

4. Joint venture equity to reduce leverage and interest costs.

5. Business loan secured on company assets for commercial lots.

FAQs

Q: How fast can auction bridging complete? A: Often within days where automated valuations and streamlined legals apply. Most cases aim comfortably inside the traditional 28-day window when documents are ready.

Q: Do I need a deposit? A: Not always. With additional security, total borrowing can reach 100% of the purchase price. Against the auction property alone, expect up to around 80% LTV.

Q: Are there monthly repayments? A: Typically no. Interest and fees can roll up and are settled at redemption, which helps cash flow during refurbishments or quick flips.

Q: What if I repay early? A: You usually pay interest only for the period used. Early redemption charges are uncommon, but always check your offer letter.

Q: Can I finance uninhabitable or non-standard property? A: Yes. Specialists will lend against properties that mainstream mortgages avoid, including heavy refurb, commercial units and unusual construction types.

Q: Does an existing mortgage stop me? A: Not if payments are up to date and there is sufficient equity. Lenders can take first or second charges across multiple assets.

How Kandoo helps

Kandoo is a UK-based retail finance broker with access to specialist auction bridging lenders. We coordinate fast decisions in principle, desktop valuations and solicitor panels to match the 28-day deadline. Our advisers structure facilities with rolled-up interest, high LTV options and clear exits, so you can bid with confidence and complete on time.

Important information

This article is for information only and is not financial advice. Bridging loans are secured and your property may be at risk if you do not keep up repayments. Terms vary by lender and individual circumstances.