Bridging finance for sealed-bid purchases

Sealed bids need speed - bridging delivers certainty

Sealed-bid purchases move quickly. There is pressure to show funds, exchange promptly, and complete within tight legal timelines. Traditional mortgages can struggle with the pace, especially when a property is unmortgageable or the seller prioritises certainty. Bridging finance fills that gap by providing short-term funding to secure the asset, then exiting via sale or refinance once the dust settles.

In 2024, UK bridging volumes reached around £6.5 billion, up 12 percent year on year. The trend is clear - investors and homebuyers are using fast capital to win time-sensitive deals. Completion times have tightened too, averaging around 52 days in mid-2024 as specialist lenders streamline underwriting. That matters in sealed-bid scenarios and auctions where completion deadlines can be as short as 28 days.

For sealed bids, credibility is everything. A strong offer pairs a realistic price with proof of funds and a clear plan to complete. Bridging lenders typically ask for a minimum 25 percent deposit for house purchases, preference for credit scores above 600, and a verified exit strategy. If you intend to refinance, lenders will want to see that your future mortgage is plausible. If you intend to sell, they will look for market evidence and timelines that support the exit.

Regulatory clarity is improving. The FCA is tightening rules in 2025 to ensure clearer fee disclosures and more robust exit checks. For first-time bridging users, this reduces the risk of surprises and encourages lenders to document both costs and contingencies. The result is a market that is growing in availability and predictability, with many expecting balances to rise materially through 2027.

Understanding APR is not just about percentages - it is knowing what you will pay in real terms and when your exit becomes viable.

Sealed bids reward the prepared. With underwriting that focuses on security, LTV, and exit strength, bridging provides the certainty sellers want and the speed buyers need. Used well, it can turn a competitive sealed-bid process into a successful acquisition.

Who benefits from this approach

If you are bidding on a property where time is critical, bridging can position your offer as credible without relying on slow mortgage processes. It suits buyers who value speed, including investors targeting below-market-value properties, chain-break situations, or homes needing refurbishment. It also helps movers who must commit before a sale completes, avoiding the risk of losing a property due to funding delays. If the asset has issues that make it temporarily unmortgageable - such as structural works required or non-standard construction - bridging can fund acquisition and works before refinancing.

Your funding choices

1. Closed bridging - fixed end date with known completion or sale, often cheaper.

2. Open bridging - flexible end date where timing is uncertain, typically higher cost.

3. Auction or sealed-bid bridge - designed for 28-day completions and proof of funds.

4. Refurbishment bridge - funds light or heavy works prior to refinance or sale.

5. First or second charge bridge - secured on the target property and possibly other assets.

What it costs and what it means

Short-term costs can be higher than mortgages, but speed and certainty can secure undervalued assets or preserve profits. Extensions add cost, so plan your exit timeline carefully.

Can you qualify

Eligibility for a sealed-bid bridge hinges on the asset, your deposit, and your exit. Expect to contribute at least a 25 percent deposit for residential purchases, with some lenders allowing higher leverage against additional security. Lenders typically prefer credit scores above 600, but the overall profile - including income, experience, and the property’s condition - carries weight. Evidence of your exit is essential. If selling, agents’ commentary, local comparables, and realistic timescales matter. If refinancing, indicative terms from a mortgage lender and proof of affordability will help.

Legal and valuation checks are standard. Properties can be residential or commercial, including those with issues that block standard mortgages. If works are planned, a refurbishment schedule and costings will be required, and drawdowns may be staged. With the FCA sharpening rules in 2025, you should expect clearer disclosure of all fees and robust assessment of your exit strategy. Kandoo works with FCA-authorised lenders and can help you prepare documents to keep timelines tight.

From offer accepted to funds released

1. Share details, objectives, and proposed exit with broker.

2. Receive heads of terms with initial pricing and structure.

3. Instruct valuation and solicitors, prepare documents promptly.

4. Lender completes underwriting and legal due diligence.

5. Final offer issued, sign and return for completion.

6. Funds released to meet the 28-day completion deadline.

Upsides and trade-offs

Before you commit

Sealed bids punish hesitation. Prepare your documents, know your numbers, and be sure your exit is realistic. Model the worst-case timeline and cost, including potential extensions and market friction. Check whether the loan is open or closed, and what happens if the sale or refinance is delayed. Confirm whether interest is rolled up or serviced monthly, and how that affects total borrowing. With new FCA expectations, you should receive transparent fee breakdowns. Scrutinise every line, including exit fees and legal disbursements. If your bid depends on refurbishment, verify that contractors, planning, and insurance are ready before exchange. The goal is to avoid surprises and keep completion on track.

A credible sealed bid pairs price with proof of funds and a verified exit.

Next steps:

• Gather proof of income, ID, and deposit source.

• Obtain a realistic valuation view and exit plan.

• Ask for a detailed fee summary and completion timeline.

Alternatives if bridging is not right

1. Agreement in Principle for a mortgage with delayed completion.

2. Vendor financing or deferred completion with a lock-out agreement.

3. Joint venture equity for deposit top-up in return for profit share.

4. Development finance if the primary objective is heavy works.

5. Secured business loan against other assets to lower LTV.

Frequently asked questions

Q: How quickly can a sealed-bid bridge complete? A: Simple cases can complete within days, but a typical timeline is 2 to 6 weeks depending on valuation, legal checks, and your document readiness.

Q: What deposit do I need? A: For residential purchases, most lenders expect at least 25 percent deposit. Higher deposits or additional security can improve pricing and approval odds.

Q: What if I cannot sell or refinance on time? A: You may need an extension, which adds cost. Plan a primary and secondary exit, and monitor milestones weekly to avoid last-minute overruns.

Q: Are closed bridges cheaper than open bridges? A: Often yes. Closed loans have a fixed repayment date linked to a known event, which usually reduces risk and pricing compared to open terms.

Q: Will bridging work for renovation projects? A: Yes. Many lenders support light or heavy refurbishments with staged drawdowns. You will need a detailed schedule, costings, and an exit plan via sale or refinance.

Q: Do I need perfect credit? A: No. Lenders assess the whole case, but stronger credit, lower LTV, and a clear exit improve approval chances and reduce cost.

How Kandoo helps you win sealed bids

Kandoo connects you with FCA-authorised bridging lenders that understand sealed-bid timelines. We help shape the exit case, prepare documents, and coordinate valuation and legal work to keep completion on track. With transparent fee comparisons and attentive case management, we aim to convert strong offers into successful completions.

Important information

This article provides general guidance and is not personal advice. Bridging finance is secured on property and may be repossessed if you do not keep up repayments. Always consider independent legal and financial advice before proceeding.