New lending with Auction Finance

Lancashire Mortgage Corporation, which specialises in semi-commercial mortgages and bridging finance, is responding to an increase in the number of properties being sold at auction, by launching a new company.

Auction Finance Limited has been set up solely to providing funds for property purchase at auction.

The new business will be of interest to property investors who will be able to expand their portfolios by agreeing loans before, during or even after an auction has taken place.

The auction process is dependent on the rapid availability of funds and auctioneers are increasingly insisting on short completion timetables.

For these reasons, Auction Finance guarantees to transfer funds within 24 to 48 hours.

The firm will provide funding from £25,000, for periods of one month to 25 years, and expects to lend £100 million in its first year of operations.

Loans are available for all types of property, including buy-to-let houses, land, factories and other commercial properties such as hotels, nursing homes, retail units and offices.

Over the past decade property sales by auction have risen substantially and according to David Sandeman, managing director of the Essential Information Group a specialist in the UK property auction sector, 37,523 lots have been offered so far this year, compared to 18,727 in 1998.

The annual value of property sold at auction has increased from approximately £1.4 billion in 1998, to around £7.2 billion.

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