Auction finance is a bridging loan used to complete an auction purchase on time. At Scottish property auctions the buyer usually pays a deposit when the lot is knocked down, typically 10% of the price, and settles the balance within a fixed period, usually 28 days or 20 business days. Check the auction’s own terms for each lot, because they decide the date, not the lender. A term lender rarely moves that fast. A bridge can, if the groundwork is done before you raise your hand.
This page is for investors and businesses buying at auction in Glasgow, Edinburgh and across Scotland: flats and houses to let or sell, and commercial and mixed-use lots. It is not for a home you or your family will live in.
Scottish auctions are run on articles of roup, the conditions of sale for each lot. When the hammer falls you sign the minute of preference and enactment, and the contract is binding there and then. There is no conditional offer and no negotiated missives. The deposit is paid on the day from your own funds, the date of entry is fixed by the terms, and if you cannot settle on that date you risk losing the deposit and paying the seller’s costs.
Every lot comes with a legal pack: the title, the Home Report on residential property where there is one, the articles of roup and any special conditions. Some packs add buyer’s fees or the seller’s legal costs on top of the price. Read it all before you bid, ideally with your solicitor, because everything in it binds you.
The time to find out whether a lot is fundable is before the auction, not after. Send us the lot number, the guide price, the legal pack if it is out and your plan for the exit. Within one working day you will have an honest view: whether a lender is likely to fund it, at roughly what loan to value and cost, and what could trip it up. On a straightforward lot that view can become terms in principle from a lender, so you bid knowing the shape of the finance.
That view also sets your ceiling. If the bridge is 70% of the price and your cash covers the rest, the tax and the costs, you know the highest bid you can complete.
The clock runs from the hammer, so the first two days decide whether you settle on time. A bridging lender will want:
The lender instructs its own valuer, who needs access to the property. On a city flat that can be days; on a rural or island lot it can take longer, so build that into your plan. Legal work runs in parallel: your solicitor and the lender’s both need to be ready to settle by the date of entry, and the lender’s solicitor must be one of the Scottish firms on its own list. Two to three weeks is realistic in Scotland. Faster is possible on simple cases.
Most bridging lenders lend against the lower of the price and the valuation. If you pay £150,000 and the valuer says £135,000, a 70% bridge is £94,500, not £105,000, and the gap comes from your cash. Keep a reserve for exactly this. Where the lot was a genuine bargain the opposite can apply, and a few specialist lenders will size the loan on the value; our below market value bridging guide explains how.
Plenty of auction lots are there because a buy to let lender would decline them. No working kitchen or bathroom, serious damp, a building with structural problems, or a commercial lot on a short lease. A bridge can buy these, provided the plan fixes the problem and the exit is a refinance or sale once it is fixed. Light works are usually funded from your cash alongside the bridge; heavier projects suit refurbishment bridging, where some lenders release money for the works in stages.
Ex-local-authority flats in some high-rise and non-traditional construction types are a separate problem: some term lenders will not lend on them at all, which makes the exit harder. Check the construction type before you bid.
Shops with flats above, small offices and industrial units come up at auction too. Bridging lenders will fund them, usually at a lower loan to value than residential, and the exit is a commercial mortgage or a sale. Mixed-use purchases are often charged LBTT at non-residential rates, which can be far cheaper than residential with ADS. Check the figures on the LBTT and ADS calculator.
Most auction bridges are repaid by a refinance onto a buy to let loan once any work is done and the property is let, or by selling it on. The refinance has its own tests, a loan to value cap and a rental stress test, and some term lenders will not refinance within six months of purchase. Our page on bridge to let finance covers those tests, and the bridge to let calculator shows how much of your cash stays in.
Illustrative, not a completed 9ROK deal.
A two-bedroom tenement flat in Glasgow’s Southside sells at auction for £150,000. The buyer pays the 10% deposit, £15,000, on the day.
The figures are illustrative and lender terms vary, but the order of events is exactly this: cash and an indicative view in place before the auction, the bridge settled inside the deadline, the refinance once the work is done.
Bridging costs monthly interest, an arrangement fee, valuation, legal fees on both sides and sometimes an exit fee. The ranges are on our bridging finance page, and the bridging loan calculator costs a bridge on your numbers.
Indicative only. Property given as security may be repossessed if the loan is not repaid, and most lenders ask directors for personal guarantees.
You can get an indicative view and, on a clean lot, terms in principle from a lender before you bid. A formal offer needs the valuation and the lender's legal work, which usually happen after the hammer falls. That is why the first 48 hours after the auction matter so much.
Two to three weeks is realistic in Scotland. Faster is possible on simple cases. A clean legal pack, a valuer who can get in quickly and a solicitor who works Scottish conveyancing every day make the difference.
You are still bound to buy. If you cannot settle by the date in the auction terms, you risk losing your deposit and facing a claim for the seller's losses. Get an indicative view before you bid, read the legal pack, and keep cash in reserve for a valuation that comes in low.
Yes, and many investors buy through a company. The company signs the auction contract, the directors usually give personal guarantees to the bridging lender, and the company normally pays the 8% Additional Dwelling Supplement on residential lots.
Scottish auction terms commonly ask for 10% of the price when the lot is knocked down, often with a minimum figure. The bridge cannot pay that deposit, so it comes from your own cash, along with LBTT, ADS and the costs.
Send the lot details, the guide price and your plan for the exit. One working day to an honest view on whether it is fundable before you bid.