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Using auction finance to realise your property investment ambitions before buyer demand returns.

30 Nov 2023 | 2 min

Scott Hendry, Director of Auction Sales at Together, shares his thoughts on how auction finance can help buyers realise their property investment goals

While the cost of living crisis hasn’t had as catastrophic an impact on the housing market as some pundits may have predicted for 2023, financial uncertainty, plus mortgage rates over 5 per cent, have meant a year-on-year decrease in sales by 23 per cent, according to Zoopla.

House prices have fallen and the pool of potential buyers has reduced, making a potentially lucrative target for investors. Auction catalogues have swelled, with many auctioneers reporting record-sized catalogues and adding additional sale dates to handle the increased demand. So, if you are looking for a residential investment, there are plenty of opportunities for buyers ready to make a deal, with great deals on auction finance too.

Auction properties make great buy-to-let investments

When sales go down, demand for rental properties generally goes up, as do rental prices. And while Rightmove forecasts show rental yield growth in the UK gradually falling over the next five years from 10 per cent in 2022 to 2.4 per cent in 2026, there’s still time to tap into the market with the right property and the right financing. Auctions can be a great place to bag a residential property ripe for BTL buyers to develop, and even HMOs with tenants already in place.

Specialist finance options help more people give auctions a go

For buyers who aren’t cash rich, auction purchases can often be challenging. Many lenders are likely to struggle with tight payment deadlines, while others may be unwilling or unable to lend on non-standard properties, or to borrowers with complex or non-standard financial situations. But there are auction finance options that can help you move quickly when you spot the lot you want.

At Together, we offer auction finance options that can be arranged within auctioneers’ usual 28-day payment window. We can give you a decision in principle in minutes through our online tool, and can offer short-term finance from just 0.79 per cent per month on residential property purchases. Our common-sense lending approach also means we can lend on non-standard properties, if you have a complex income, or if you have blips on your credit record, as we’ll look at the person behind the numbers rather than relying on strict tick box criteria.

Our auction finance means that you can secure a 12-month deal that can be in place as soon as the auctioneer’s hammer has fallen, with a view to finding longer-term funding sources like a standard BTL mortgage at a later date – over both the short and longer term.

While auctions used to be the preserve of the cash-rich property investor, they are now regarded as much more mainstream thanks to popular TV shows like Homes under the Hammer and The Great House Giveaway. Plus, with many auction sales now being online you can literally buy a property from your living room. With rates starting from just 0.79 per cent, a decision in principle available online in minutes often with a free desktop valuation and a swift legal process, we’re proud to play our part in opening up the world of auctions for a much larger pool of buyers.

Despite the challenges in the housing market, property remains a solid investment option for many, and we’re pleased to be able to help more people achieve their property ownership ambitions.

Ready to explore auction finance from Together? Find out more and get a decision in principle today.

All content factually correct at the time of publishing.

Articles on our website are designed to be useful for our customers, and potential customers. A variety of different topics are covered, touching on legal, taxation, financial, and practical issues. However, we offer no warranty or assurance that the content is accurate in all respects, and you should not therefore act in reliance on any of the information presented here. We would always recommend that you consult with qualified professionals with specific knowledge of your circumstances before proceeding (for example: a solicitor, surveyor or accountant, as the case may be).

Lending decisions are subject to an affordability/creditworthiness assessment.

Any property used as security, including your home, may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

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