Bridging Loan for Property That Failed at Auction

Deal Structure

• 70% Loan to Value (LTV) on Day 1
• Refurbishment works funded in arrears
• Interest rate: 0.79% per month (retained)
• 2% arrangement fee
• No exit fee
• No additional broker fee
• 12-month term

Deal Summary

Our client agreed to purchase a residential property in Norfolk that had previously failed to sell at auction.

Although the property had not sold, the purchase still had to proceed under auction conditions. This meant the client faced a strict 28-day completion deadline.

The property was run-down and required significant refurbishment. The planned works represented around 25% of the purchase price.

Our client had extensive experience carrying out similar property projects. They planned to manage the refurbishment themselves and deal directly with the subcontractors.

Because the property had previously failed to sell at auction, some lenders may have been reluctant to support the purchase. However, we work with specialist lenders who assess each proposal on its individual merits.

We approached lenders with an appetite for more unusual property transactions. This allowed us to secure a bridging loan for a property that had failed to sell at auction, despite the potential concerns around the previous auction result.

The finance provided 70% Loan to Value on Day 1, with the refurbishment costs available in arrears. The facility also offered a competitive interest rate of 0.79% per month, a 2% arrangement fee and no exit fee.

Speed was also critical. The client needed to complete within the auction’s 28-day timeframe.

We successfully completed the purchase in good time. The client could then begin stripping out the property and move ahead with the full refurbishment.

Once the works are complete, the client plans to sell the refurbished property on the open market.

The Outcome

The successful bridging facility allowed our client to purchase a property that had previously failed to sell at auction. It also provided the funding needed to begin the refurbishment.

This case demonstrates how specialist auction bridging finance can help property investors secure opportunities that may not fit traditional lending criteria.

If you are looking for bridging finance for an auction property, particularly where a previous auction sale has fallen through, Positive Commercial Finance can help identify specialist lenders willing to consider the wider circumstances of the deal.