Auction finance · England & Wales
Auction finance, ready before the hammer falls
Fast, specialist funding to complete your winning lot inside the 28-day auction deadline – from £75k to £10m, against residential and commercial property. Get pre-approved before you bid and deal directly with the decision-makers.
The basics
What is auction finance?
Auction finance is short-term property funding built for one job; completing a lot bought at auction inside the tight deadline the auction house sets. When the hammer falls you are legally committed. You pay a deposit on the day, usually 10% of the purchase price, and you have a fixed window, typically 28 days, to pay the balance and complete. A high-street mortgage rarely moves fast enough, so buyers use a bridging loan secured against the property instead.
It is the same product as a bridging loan, a loan secured with a legal charge over real estate, arranged in days rather than weeks – used specifically to manage an auction timeline. At Proxima Capital we lend from £75k to £10m across England and Wales, and we structure the case around the completion date from the very first call.
Mechanics
How auction finance works
The path from catalogue to keys runs on rails. The winning bid, the 10% deposit and the start of the 28-day clock all happen on the day of the auction, so the finance has to be lined up before you raise your paddle – not scrambled together after. In practice it looks like this:
The deadline
Completing inside the 28-day deadline
Most UK auction contracts require completion within 28 days of the hammer falling, some auction houses set 14 or 20 days, so always check the completion date in the legal pack before you bid. Miss it and you could forfeit your deposit and face further costs, which is why speed is central to auction finance. The valuation and the legal work are the two things that eat into your time, so we start both immediately and run them side by side.
We work with best-in-class solicitors and market-leading title indemnity insurance to keep completion fast and increase certainty, and we issue a decision in principle within 24 hours so nothing waits on us. Where the valuation and legals allow, cases can complete in days rather than weeks; see fast bridging loans for how we compress the timeline.
Before you bid
Get pre-approved before you bid
The single biggest mistake at auction is bidding without having your finance in place. Review the legal pack, check the tenancy position, view the lot, and get your funding pre-approved before the purchase. A decision in principle determines your maximum bid and gives you the confidence to commit the 10% deposit the moment you win – because you already know the balance will be there.
Share the lot and guide price with us and we will size the loan, sense-check the exit and issue the decision in principle within hours. If a lot doesn’t stack up, we would rather you knew before you bid than after. And the pre-approved terms are the terms you complete on – no goalposts moving between quote and completion.
What we fund
Residential and commercial lots
Auction catalogues run the full range, and so do we. We finance auction purchases against residential property, semi-commercial and commercial property, including the kind of lots that scare off high-street lenders – unmortgageable, uninhabitable or short-lease stock that is precisely why the buyer is at auction in the first place. Loan to value goes up to 75% against residential security, with lower limits on semi-commerical and commercial where the market moves the risk.
- → Residential houses and flats to refurbish, let or sell
- → Buy-to-let, HMO and MUFB lots before refinance
- → Unmortgageable or uninhabitable property
- → Commercial and semi-commercial units
- → Mixed-use lots with a shop and flats above
- → Land with the right planning position
If the lot needs work, we can lend for the purchase and structure the case alongside refurbishment finance, drawn against the works. Each asset class has its own valuation and LTV considerations, which we agree with you up front.
Cost
What does auction finance cost?
Auction finance is priced like any bridging loan: interest is charged monthly, not annually, with Proxima rates from 0.85% per month. Your rate depends on the asset, the loan to value, the charge and the strength of your exit. On top of interest you should budget for an arrangement fee (usually 2% of the loan), a valuation, and legal costs. Because the term is short the loan runs only until you sell or refinance, the total cost is usually modest against the profit or the price you secure at auction.
Interest can be retained, rolled up or serviced monthly, whichever suits your cash flow. Our bridging loan calculator shows the gross and net figures, and the full breakdown sits on our bridging loan rates and costs page.
The thing that matters
Your exit comes first
Auction finance is short-term by design, so it needs a clear way out. Your exit is usually the sale of the lot once refurbished, or a refinance onto a term mortgage or buy-to-let facility once the property is let. We structure every case around that exit before we lend because a credible, evidenced plan to redeem is what turns a fast completion into a clean one, and that protects you from a potentially costly default at the end of the term.
Auction finance is a regulated bridging loan when the lot is a home that you or an immediate family member will live in, and unregulated when it is investment or commercial property; the property’s use sets that, not the lender. Your property may be at risk if you do not keep up repayments on a loan secured against it.
Auction finance with Proxima
Speed, and a decision-maker on the phone
A 28-day deadline is unforgiving, so who you borrow from matters as much as the rate. Proxima was founded by highly experienced operators who have overseen in excess of £500m of property lending, so you deal directly with the decision-makers and get a prompt decision in principle within 24 hours. No broker chain, no drift before exchange – just best-in-class solicitors and market-leading title indemnity to keep completion fast and certain, even against an auction deadline.
Explore
Bridging finance, by case
Fast bridging
How we compress the timeline to hit a tight completion deadline.
See how we compare to other bridging loan lenders and brokers →
FAQs
Auction finance questions, answered
What is auction finance and how does it work?
Auction finance is a short-term bridging loan secured against the property you buy at auction. You get pre-approved before the sale, pay the 10% deposit when the hammer falls, and the lender releases funds so you can pay the balance and complete inside the auction house deadline – typically 28 days. It is repaid from your exit, usually a sale or a refinance once the lot is sold, let or refurbished.
Who typically uses auction finance?
Property investors, landlords, developers and refurbishers who buy at auction and need to complete on time. It is also used by buyers of unmortgageable or uninhabitable lots that a high-street mortgage won’t touch, and by anyone who spots value at auction but can’t wait weeks for a term mortgage to arrive.
How much does auction finance cost?
Interest is charged monthly, with Proxima rates from 0.85% per month, plus an arrangement fee of commonly around 2%, a valuation and legal costs. Your rate depends on the asset, the loan to value, the charge position and your exit. Because the term is short, the total cost is usually small against the price you secured at auction – the calculator shows the full figures.
Can I get auction finance for a commercial lot?
Yes. We fund auction purchases against commercial and semi-commercial property as well as residential lots, including mixed-use stock. Loan to value is lower on semi-commercial commercial than the 75% available on residential security, reflecting the way the market prices that risk, and we agree the figure with you before you bid.
What happens if I miss the 28-day completion deadline?
Missing an auction completion date can mean forfeiting your 10% deposit and facing interest and costs, and in some cases losing the property. That is why the finance has to be arranged before you bid, not after. We pre-approve you, issue a decision in principle within 24 hours and run the valuation and legals in parallel so the deadline is protected from day one.
Got a lot in mind?
Send us the catalogue and the guide price and you’ll get an honest, commercial view the same day direct from the decision makers, in time to bid.
