Start a conversation
info@w1finance.co.uk
Auction Finance
When acquiring property at auction, including commercial real estate, payment is typically required within a specific timeframe, often 28-30 days from the auction's conclusion.
Conventional financing options like mortgages or bank loans are often too slow to arrange within this brief window. For those in need of an auction bridging loan, W1 Finance is here to assist. We specialize in facilitating auction finance to support your next property purchase.
Note: The primary difference between an open bridging loan and a closed bridging loan hinges on the exit strategy. An open bridging loan lacks a guaranteed exit date, whereas a closed bridging loan involves simultaneous exchange and completion of a sale on the bridging loan's finalization day. However, the application process for both types of loans remains consistent.
Financing Auction Purchases
When acquiring property at auction in the UK, successful bidders must immediately place a 10% deposit on the purchase price. The remaining balance must be settled in full within 28-30 days.
However, this brief timeframe limits access to conventional financing options like mortgages and mainstream loans, which typically involve lengthier processing periods.
An auction bridging loan serves as a specialized type of short-term finance. It is specifically designed for property developers and investors purchasing auction properties, providing rapid access to funds necessary for the prompt completion of your purchase.
Facilitating Property Auction Finance
Purchasing property at auction involves two essential payments:
-
Deposit or Reservation Fee: On auction day, you must provide a deposit, typically 10% of the property price, or a reservation fee, which usually amounts to 2-4% of the purchase price plus VAT.
-
Remaining Balance and Fees: Completion day follows 28-30 days after the auction (each lot has its own deadline), requiring payment of the outstanding balance for the property and any associated fees.
For those considering bridging finance for auction purchases, it is advisable to identify prospective properties several weeks ahead of the auction. This proactive approach allows bridging lenders to prepare preliminary offers in anticipation of a successful bid.
Once the auctioneer's gavel falls, the transaction becomes legally binding under the Sales of Goods Act 1979. This signifies that both the buyer and seller are obligated to finalize the property purchase.
Upon winning the auction, notify us promptly, and we will expedite your application process for auction finance without delay.
Lending Criteria
Criteria | Details |
|---|---|
Loan to Value (LTV) | Up to 75% |
Location | England, Wales, Scotland & Northern Ireland |
Loan amount | £100,000 to £50million |
Interest options | Serviced, retained, Rolled-Up |
Interest rates | Starting from 0.6% per month |
Decision | Immediate |
Completion | 10-14 working days |
