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Executive summary
The Modern Method of Auction (MMoA) is a conditional, online auction designed for ordinary buyers who need a mortgage, not just cash investors. Win the bid, pay a non-refundable reservation fee and you then typically have around 56 days to exchange and complete (commonly 28 days to exchange + 28 days to complete).
Its that timeline that enables a mortgage possible for an auction purchase. However, you must get it right.
Key points at a glance:
- Timeline: About 56 days from the auction end to completion (28 to exchange + 28 to complete). Faster than a private treaty sale, slower (on purpose) than a traditional auction.
- Costs: Buyers usually pay a reservation fee (between 2 to 5% or a minimum set by the auction platform) on top of the purchase price. You also cover need to cover normal purchase costs (deposit at exchange, conveyancing, valuation, SDLT).
- Stamp Duty Land Tax: HMRC can treat certain compulsory buyer fees as chargeable, which can increase the SDLT base. Always ask your solicitor to confirm how your specific fee is treated, but your mortgage adviser will help.
- Who it suits: First-time buyers, movers and landlords who want speed, transparency and a clear timetable, and of course who can move quickly on a mortgage.
- What to watch: The reservation fee is non-refundable if you pull out , so you must get your Mortgage in Principle (MIP), solicitor and documents ready before bidding.
One key rule for modern method of auction mortgages, is get your mortgage in principle first!
How Modern Method of Auction Works
FAQ’s for Modern Method of Auction
Yes. A Decision in Principle (DIP) proves your budget, speeds up the underwriting process, and lets you move straight to a valuation after you win. It’s crucial to have this ready before bidding.
No, the reservation fee does not reduce the mortgage deposit or purchase price. It is considered a transaction cost.
Traditional auctions are unconditional at the hammer fall and complete in 28 days. MMoA is conditional: you pay a reservation fee and get around 56 days to arrange a mortgage and complete legal formalities.
The reservation fee is generally between 2% and 5% of the purchase price, paid by the buyer, and is non-refundable if you pull out. It’s essential to check each listing’s terms and conditions.
The Modern Method of Auction (MMoA) is a conditional online auction. Winning the bid requires paying a reservation fee for exclusivity, then typically you have 56 days to finalize the purchase, making it mortgage-friendly compared to traditional auctions.
Mortgage Experts for Modern Method of Auction
Modern Method of Auction is becoming more popular, offering flexibility and better timescales for both buyers and sellers. With much more succinct costs, property reservation methods and simplicity of process, this area of the property market is going more and more online. If buying through an online auction, you are legally committed and therefore must ensure you are fully knowledgeable on how these mortgages operate, so that you can follow through with the commitment to purchase.
- Clear concise guidance
- Access best rates in the market
- Get mortgage ready for auction
- Completions within 56 days
Traditional Auctions
Traditional Auctions still take place and require mortgage expertise. You can buy at an auction with the right mortgage, but there are plenty of things that must be considered. Speak with The Mortgage Broker today to understand your options.
15 Min Mortgage In Principle 35% year on year growth for online auction salesMortgage Turned Down Elsewhere? See How These Buyers Got Approved
Initial Enquiry
First-time buyer clients approached us with a complex situation. They had been successful at a property auction and were under a strict deadline to complete the purchase. To make things even more challenging, another mortgage company had turn them down, and they were concerned about a previous credit blip and proving income.
We do recommend you speak to a mortgage adviser before going to auction, to ensure finance can be arranged, as the timescales can be very demanding.
| Commitment Type | Property Value | Balance | Loan to Value | Term | Payment Type | Interest Rate | Product Type | Payment |
| New Mortgage | £320,000 | £288,000 | 90.00% | 35 years | Repayment | 4.84% | 5 year fixed | £1,421.00 |
The Challenge
The clients were in a difficult spot. They had already paid a significant deposit on the auction property and stood to lose it if they couldn’t secure a mortgage in time. With the clock ticking and their last application having failed, they were feeling immense pressure. Their financial profile was also a bit unusual, with one client being a CIS contractor and the other working in an employed role, which can sometimes complicate things for traditional lenders. They also had the minor credit issue. We had to find a solution fast that could handle the tight deadline, the auction purchase, and their unique circumstances.
The Solution
We immediately got to work, prioritising speed and efficiency. We identified a lender who could process their application quickly and was comfortable with both the auction timescale, the credit issue and the clients’ income type. We collected all the necessary documents and submitted the application on the same day. Our team then maintained communication with the lender, the solicitor, and the clients to ensure everything progressed smoothly and to prevent any delays.
The Result
Thanks to our rapid action and close management, we received the mortgage offer quickly. We then worked closely with all parties involved to push the purchase through to completion. The clients were able to secure the property and successfully complete the purchase well within the deadline.
How Did This Help?
This outcome was a huge relief for the clients. By acting swiftly and understanding their unique needs, we were able to secure a mortgage for them and save them from losing their deposit and their dream home. They were able to get on the property ladder and explained in their Trustpilot review that they were extremely grateful for the support and expertise that made the seemingly impossible, possible.
Advisor: Harrison AndrewsBrilliant service... good digital support meaning a faster, slicker service. Stress free and great, easy to understand advice given
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Benefits of Modern Method of Auction
- Complete Faster
- Quick and Easy Bidding
- Buy with a Mortgage
- Additional Security
- Transparency
Completing within 56 days, you can control purchasing timelines. Bidding from the comfort of your own home you can speak with The Mortgage Broker and get a decision in principle to ensure you are mortgage ready to bid on the right property.
With the binding reservation agreement, both the buyer and the seller have additional security throughout and there is complete transparency of the whole process.
Yes. Some auction platforms charge for a Buyer Information Pack, and there may be other fees listed in the auction description. Read all fee schedules carefully.
A standard mortgage typically suffices with the 56-day window provided. Bridging finance might be needed if the property isn’t immediately mortgageable or if there’s a risk of missing deadlines.
Yes, but be prepared to pay the reservation fee and any platform charges up front, over and above your 10% deposit. A mortgage in principle is essential beforehand.
If you withdraw before exchange, you forfeit the reservation fee and any sunk costs. After exchange, failing to complete risks losing the contract deposit.
Possibly. Fees that are a condition of purchase can increase the basis for Stamp Duty Land Tax (SDLT). Confirm with a solicitor how this fee is treated.
How do auction purchases work?
Modern Method of Auction is a popular auction method used across the UK for selling residential and commercial properties.
- Listing: The property is listed as per any sale, with an auctioneer and/or an online auction platform.
- Marketing: Online advertising and promotion is far wider reaching for online auctions.
- Viewings: Potential buyers still need to view the property as per any purchase. This isn’t required, but recommended.
- Bidding: Like any auction, there is a typical bidding style process over a selected period of time. All electronically.
- Reserve Price: Just like many online marketplaces where people sell assets, the seller sets a minimum price that can be met.
- Completion: Once the auction has concluded, the highest bidder secures the property. Just like any traditional sale, the transaction is complete with the exchange of contracts – however, often all done within 56 days.
YES. You can buy a property through the modern method of auction with a mortgage. Speak to one or our experts today to understand more and get access to the best lenders who can get you mortgage ready so you are in a position to start bidding. At The Mortgage Broker, we understand the auction process and can access lenders to assist with this type of purchase. Our specialist advisers can help with your financial preparation and ensure you are giving yourself the best chance of success. There are a few things to consider when getting a mortgage for auction: Mortgage Approval: It is really important to get a Decision in Principle from a lender before you start bidding. This not only puts you in a position of strength, but ensures you won’t fall foul of any timelines should you be the highest bidder. Deposit: You will need to have a deposit ready as if your bid is successful, you will be expected to pay a deposit within a couple of hours to secure the purchase. There is a reservation fee, which is added on top of the property value. so needs to be considered when assessing your affordable options. Auction Fees: There can sometimes be additional fees associated with purchasing at auction and therefore, need to understand all costs when assessing your mortgage options. Timeframes: 56 Days. This is usually the specified completion timeframe – therefore, being mortgage ready is critical for a successful auction purchase. Risks: There are different risks when purchasing a property at auction so doing your due diligence is very important. As standard, these should include legal checks, surveys and understanding any further issues associated with the property.Can I get mortgage to purchase a property through auction?
Modern Method of Auction - Get a Decision in Principle Today
Generally, yes. However, lenders might decline due to short leases or poor property conditions. It’s advisable to seek professional advice before bidding.
Yes, if the Decision in Principle, solicitor, searches, and valuation are all pre-arranged, it can be fast-tracked to 28-42 days.
Yes, usually faster with a fixed timetable and often chain-free, reducing the risk of the sale falling through compared to private sales.
You can still withdraw pre-exchange, but will likely forfeit the reservation fee. Hence, a pre-bid review of the legal pack is highly advised.
It’s crucial to review the legal pack, get a mortgage in principle, and understand costs like SDLT before bidding. Any uncertainties should be clarified with your mortgage advisor.
Recommend for first time buyers. We had previously been rejected by an unhelpful company and we were recommended the mortgage Broker and we are so happy with them. They have a much more personal relationship with the company's they use, so we were approved straight away. Made this experience so easy for us as first time buyers. Harrison has been so helpful always answering our questions and calls. Making the process as easy and as straightforward as possible and we are so grateful for that.
Frequently Asked Questions: Mortgages for Modern Method of Auction
A conditional online auction. Win the bid, pay a reservation fee for exclusivity, then you usually have 56 days (28 to exchange + 28 to complete) to finish the purchase; making it mortgage friendly compared with a traditional, unconditional auction.
Traditional auctions are unconditional at the fall of the hammer and typically complete in 28 days. MMoA is conditional: you pay a reservation fee and get time (around 56 days) to arrange a mortgage and legals before exchange and completion.
Expect roughly between 2% and 5% of the purchase price (or an auction platform minimum). It is paid by the buyer, sits on top of the price, and is generally non-refundable if you withdraw. Check the listing T&Cs.
No. It is separate from your mortgage deposit and does not reduce the price you pay. Treat it as a transaction cost.
Possibly. HMRC guidance says fees that are a condition of the purchase can be chargeable consideration, meaning SDLT may be calculated on price plus that fee. Your solicitor should confirm how your specific fee is treated before you bid.
A normal mortgage is usually fine and that is the point of the 56 day window. Bridging is typically a back up where the property isn’t mortgageable yet or you’re at risk of missing a deadline.
Yes but budget beyond your 10% because you will also need to pay the reservation fee and any platform charges up front, separate from your mortgage deposit. Have a mortgage in principle ready and move fast after winning.
If you withdraw before exchange, you will usually forfeit the reservation fee and any other sunk costs (survey, searches). If you’ve already exchanged and then fail to complete, you risk losing your contract deposit and more. Proceed only once funding looks solid.
Often yes. Some platforms charge for a Buyer Information Pack (example: £349 incl. VAT on one major platform). Read the listing’s fee schedule carefully.
Generally, yes. MMoA targets a wider pool of buyers, including those using mortgages. But lenders can still decline properties with short leases, poor condition, or non-standard construction. Get advice before you bid.
Typically, yes. You have a fixed timetable and most sales are chain free, which reduces fall-through risk versus private sales. The speed still depends on how quickly you, your mortgage lender and your solicitor move.
The Mortgage Broker are experts in getting a modern method of auction mortgage.
Read the legal pack, get a mortgage in principle and let us help you line up a solicitor, price your SDLT (including any chargeable fees) and decide the benchmark number in which you would walk away. If anything’s unclear, ask your mortgage adviser before you click “bid.”
Conclusion: MMoA is a smart middle ground offering auction speed with mortgage realism. If you prepare properly, with a mortgage in principle and a solicitor engaged ready to go, with all fees understood – you can buy with absolute confidence on a timetable that actually works.
Methods of Auction
Modern Method of Auction (MMoA) can also be known as conditional method of auction. Exchange and completions take place within 56 days and with a reach across the UK, enable many more potential buyers into the market.
Essentially, the fundamentals of the mortgage are the same, however, with Modern Method of Auction, you will be required to sign a reservation agreement, in case you are a successful bidder. This is because, on completion, both parties have security that the buyer has a reservation to the property, and is committed to the seller in completing the purchase.
Decision in Principle
As a successful bidder, you will be required to complete the purchase within 56 days, and therefore, you must have a decision in principle arranged prior to the bidding, to ensure you don’t jeopardise your purchase if financing through a mortgage. The Mortgage Broker can deliver same day decision in principles for modern method of auction purchases.
Faster, More Secure Methods of Sale
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Winning Bid
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Non-refundable Reservation Fee
Within 2 hours of the auction ending, the successful bidder will have to pay a non-refundable reservation fee. This is paid in addition to any asking price (price can be negotiated as usual prior to commitment of course) and therefore, needs to be considered in any affordability tests when confirming the amount you wish to pay for the property.
Reservation Agreements are contained within a buyers pack and here are a couple of example’s to help you understand the sort of expectations that are contained within it.
Example Clause
4.7. The Seller agrees that the Reservation Fee paid under Clause 1.1 of this Modern Method of Auction Reservation Agreement is to be repaid to the Buyer, within 5 working days after the Termination Date, if the Buyer has been unable to exchange within the Reservation Period for any of the following reasons:
4.7.1. The purchaser does not have sufficient funds to proceed with the purchase of the Property as a direct result of a related remortgage or sale of another property in England or Wales failing to proceed.
The importance in being prepared for auction is paramount and The Mortgage Broker will ensure you are set up to complete successfully. The above extract illustrates the requirement to have an agreement in principle ahead of any bidding process.
Property Websites
When searching for properties across popular websites such as Rightmove or Zoopla, you will start to see an increasing number of properties that are being sold by auction. You will find common wording across these sites. Here is an example of what you may see:
This property is offered through Modern Method of Auction. Should you view, offer or bid your data will be shared with the Auctioneer [name of company]. This auction method requires all parties to complete the transaction within 56 days, enabling buyers to proceed with mortgage finance (subject to lending criteria, affordability and survey). The buyer is required to sign a reservation agreement and make payment of a non-refundable Reservation Fee of [X%] of the purchase price including VAT, subject to a minimum of [£XXX]. This fee is paid in addition to the purchase price and will be considered as part of the chargeable consideration for the property in the calculation for stamp duty liability.
This property offers a Buyer Information Pack containing documents around the property. These documents may not tell you all you need to know about this property, and therefore, we encourage you to complete your own due diligence before bidding. You will find enclosed in this pack a sample Reservation Agreement and T&C’s and the buyer will be expected to make a payment of [£X] towards this pack preparation.
A deeper look into the Modern Method of Auction.
Yes. It proves your budget, speeds underwriting and lets you move straight to valuation after you win. Have ID, payslips, bank statements and credit info ready. If you’re not AIP ready, don’t bid.
Habitable condition (working kitchen/bathroom), sound structure, clear title, sensible lease length for flats and no major unresolved risks (e.g., severe damp or subsidence). If anything’s borderline, expect conditions, a reduced loan, or a decline.
The lender’s valuer confirms the market value and saleability. If it is down valued, your options are:
- increase your deposit
- renegotiate the price
- try a different lender orproduct
- walk away (you’ll likely lose the reservation fee).
Book valuation day one to keep the 28/56-day clock on track.
- Immediately after winning: reservation fee (separate from price/deposit).
- On exchange (circa day 28): your mortgage deposit.
- On completion (circa day 56): remaining funds drawn from the mortgage; pay SDLT and conveyancing costs.
Same auction timeline, but lenders apply rental stress tests and may require higher deposits. Get a realistic rent figure, check EPC, and line up valuation quickly. Company let properties or HMOs may need specialist lenders.
Years remaining on the lease, ground rent/review clauses, service charges, major works and building safety requirements. Very short leases can be unmortgageable; factor in the cost/time of a future lease extension before you bid.
Yes. Expect director guarantees and different product pricing. Have your SPV documents, accounts (if any), and ID checks ready so underwriting doesn’t stall your 28/56-day timetable.
Often, yes. If your AIP, solicitor, searches and valuation are front loaded, 28–42 days is achievable. Tell all parties your target dates on day one and keep responses same day.
You are still pre-exchange, so you can withdraw, but you’ll almost certainly forfeit the reservation fee. This is why we advise a legal-pack review before bidding wherever possible.