Auction Finance lends £25m in property market
By Bridging Loan Directory -
A growing trend for developers to buy property at auction saw a Manchester lender hand out a record £25m in the year to the end of July.
The figure represents a 14 per cent increase on the £22m lent by Auction Finance in the previous 12 months.
Auction Finance specialises in lending to small and medium-sized developers of residential and commercial schemes where cash is needed quickly to buy property at auction.
Usually, after the deal is completed, the developer secures long-term finance elsewhere.
Auction Finance said the growing popularity of auctions helped increase the rate of lending despite tough market conditions in the rest of the property finance sector.
The Manchester-based company typically lends 70-75 per cent of a property’s value, with loan sizes varying from £25,000 to £1m, with an average of £74,500.
The company works with major auction houses across the UK including Venmores, Auction House and Eastern Counties Auctions.
Director Chris Baguley said: “We’ve focused on partnering with reputable auction houses, which is producing good results.
“We’re also educating investors and property professionals of the benefits of having the funding available quickly, because we know that as many as 30 per cent of people who win bids at auction are let down by their usual lender at the last minute for a variety of reasons.
“We’re able to transfer funds to investors within 24 hours following completion of an auction so that they can meet the tighter deadlines under auction rules. For professional property people this is vitally important.”