The specialist finance broker said the requirement to complete, typically within 28 days of the hammer falling, leaves little room to resolve issues, with some buyers facing lost deposits or failed transactions

Loans Warehouse has warned that property buyers entering auctions without funding arranged are exposing themselves to increasing financial and legal risks due to tight completion deadlines.

The specialist finance broker said the requirement to complete, typically within 28 days of the hammer falling, leaves little room to resolve issues, with some buyers facing lost deposits or failed transactions.

It added that a lack of awareness around funding options and legal considerations is leaving some buyers vulnerable, despite auctions continuing to attract strong interest from investors and homebuyers.

Vikki Edwards, head of bridging and development at Loans Warehouse, said: Auction purchases move incredibly quickly, and once the hammer falls, buyers are legally committed.

If funding isn’t already in place, or if issues arise during the process, there is very little time to react, she said.

We’re seeing more cases where clients are caught out, not because the deal is bad, but because they weren’t fully prepared for the speed and complexity of the transaction, she said.

The broker highlighted a recent case where a buyer discovered missing details around private water and drainage after securing a property at auction, with search results not due back until after the completion deadline.

Loans Warehouse worked with the lender to secure an indemnity policy, allowing the deal to complete within 28 days and avoiding financial loss for the client.

Edwards added: This is a good example of where the right support and lender relationships can make the difference.

She said: But it also highlights the risk, if funding and strategy aren’t considered upfront, situations like this can easily lead to failed completions.