Many property auctioneers now conduct auctions online, which allow buyers from all over the world to bid on properties without having to travel to an auction venue, as a January 2017 BridgingAndCommercial.co.uk article discusses.
According to the Essential Information Group, property auctions experienced a 10% loss in business in 2016 compared to 2015. The growth of online property auctions could mean that in 2017, this downward trend will be reversed, making it a potentially strong year for this sector of the housing market.
It has been estimated that 80% of buyers at property auctions are cash buyers. What puts off many buyers is that to secure a successful bid, a 10% deposit is usually required and completion of the purchase has to be made within 28 days, Traditional forms of lending such as standard mortgages take time, so there is no guarantee that the mortgage funds will be available in time to meet the completion deadline.
The answer to this issue is a bridging loan, which can be arranged and funds available in a matter of days. A short-term bridging loan can be an ideal way to raise finance before a longer-term mortgage can be completed.
There are some bridging lenders that specialise in property auction lending for both the deposit and the completion finance. These lenders make the process of auction property finance swift and straightforward.
Some lenders are working with auction houses to prequalify property for lending purposes so that prospective buyers know that finance is available for successful bids,