"With interest rates expected to fall over the rest of the year, and lenders offering more favourable rates than the start of 2025, there’s a chance the property market will heat up, and with it the demand for auction properties"
- Ryan Etchells - Together
While the UK’s property market has certainly experienced more than its fair share of ups and downs over the last few years, there’s one trend that’s been growing.
Across the country – and online - the number of property auctions has been on the rise, bringing auction finance into the spotlight as an increasingly attractive route for both seasoned investors and a wave of new entrants into the housing market. Indeed, the numbers show no signs of this growth slowing.
Our own internal data shows considerable year-on-year growth from 2023-2024, with 41% more auction finance applications financed in 2024 than the year prior. 2025 looks to break even more records, with £82 million financed for auctions up to the end of May - a 15% increase on the same period in 2024.
According to EIG’s Q1 2025 data, the national auction market continues to show strength, with a 7.2% rise in lots offered year-on-year and a 10.6% increase in total money raised.
Why the auction property market is on the rise
Unlike traditional mortgages, which can take weeks or months to secure, auction finance is essentially a short-term loan designed to meet the tight timelines of property auctions, which often complete within 28 days. The buyer can use it to seize an opportunity, purchasing a property before completing renovations, and then selling or ‘flipping’.
Alternatively, they can refinance the short-term loan with longer-term borrowing through a traditional mortgage (if they intend to live there) or a buy-to-let mortgage if they plan on renting out the property.
The appeal of auction finance has also been fuelled on the other side by the proliferation of attractive investment opportunities for the buyer. Properties which might not traditionally be available on the open market (often unique or distressed) offer opportunities for the prospective property investor or homeowner.
Who are the new buyers?
Today’s auction buyers are a more diverse group than pre-2020. Alongside professional landlords expanding their portfolios, we’re now seeing more and more first-time investors entering the space. A noticeable shift is also emerging geographically. While London remains resilient, regions such as the North and the West Midlands are outperforming the capital in auction activity. Cities in these regions offer a steady supply of auction stock with great potential for resale uplifts.
Property auctions are also enabling a shift in strategy, with investors having the opportunity to pursue mixed-use or non-standard properties that traditional lenders may shy away from. This includes former retail premises, pubs, and community buildings with development potential, especially areas that are currently being targeted for redevelopment by the Government.
The outlook ahead
With interest rates expected to fall over the rest of the year, and lenders offering more favourable rates than the start of 2025, there’s a chance the property market will heat up, and with it the demand for auction properties. As more and more prospective buyers get to know the advantages of buying through this route, auction finance will be set to play an even greater role in the property investment ecosystem.
With specialist lenders - such as Together - refining their products for speed and flexibility, it’s vital that prospective buyers know what they are able to do with the products available to them.
