The UK’s bridging loans market continues to demonstrate strong momentum, with industry data suggesting the market could reach approximately £12.2 billion by 2026. This follows a period of sustained expansion in recent years, during which the total bridging loan book first surpassed the £10 billion mark.
The sector’s continued growth reflects strong demand from property buyers, developers and businesses seeking flexible, short-term lending solutions that operate outside the more rigid processes typically associated with traditional mortgage lenders.
Why Has the Bridging Loan Industry Grown So Significantly?
Bridging loans have grown in prominence since the 2008 financial crisis, when many high street banks tightened lending criteria and adopted a more cautious approach to risk. In response, specialist lenders such as MT Finance, Precise Mortgages and Maslow Capital expanded their offerings, providing short-term finance that could often be approved and completed far more quickly than conventional bank lending.
Over time, the bridging sector has matured into a credible alternative to traditional bank finance for a wide range of property-related transactions.
One of the key drivers behind its growth is speed of execution. Traditional mortgage processes can involve extensive credit checks and affordability assessments, often leading to lengthy completion times. By contrast, bridging lenders typically focus primarily on the value of the security asset and the viability of a clear exit strategy. This approach enables faster decision-making, which is particularly valuable in time-sensitive situations such as property auctions or chain breaks.
What Is Bridging Finance Typically Used For?
Bridging finance is commonly used where rapid completion is essential.
For homeowners, it can provide a temporary solution to avoid breaking a property chain, enabling the purchase of a new home while waiting for an existing property to sell. Investors and landlords frequently use bridging to secure properties that may not initially qualify for a standard mortgage — for example, assets requiring refurbishment — with the intention of refinancing once improvements are complete.
Developers may utilise bridging loans to cover short-term funding gaps within broader project finance structures. Businesses outside the residential market can also use bridging facilities to support cash flow management or fund time-critical strategic opportunities.
Regulation in the Bridging Sector
Approximately half of bridging loans in the UK are regulated by the Financial Conduct Authority (FCA), generally where the loan is secured against a borrower’s primary residence. The remainder are unregulated, typically supporting commercial or investment property transactions.
This regulatory split allows the sector to serve both consumer borrowers and professional investors with products tailored to their respective needs.
Typical Rates and Lending Criteria
Despite its growth, bridging finance remains a specialist area with distinct risk and pricing considerations. Interest rates and fees are generally higher than those associated with traditional mortgages. Rates commonly range around 1% per month, although this can vary depending on loan-to-value, borrower profile and the strength of the proposed exit strategy. By comparison, a standard high street mortgage may sit significantly lower on an annualised basis.
Borrowers must therefore have a clearly defined exit plan — such as a property sale or refinancing into longer-term finance — to ensure repayment within the agreed short-term period.
Maximum loan-to-value ratios are typically around 75%, although higher levels of 80% or even 85% may be achievable in certain cases where additional guarantees or security are provided.
Outlook for the Sector
The outlook for the UK bridging market remains positive. Growth in both applications and completions suggests continued strengthening, supported by lender confidence and intermediary engagement. With under 100 specialist lenders operating in the UK and thousands of intermediaries active in the space, bridging finance has established itself as an important component of the broader property finance landscape.
In summary, the UK bridging loans market continues to evolve. Its ability to provide fast and flexible funding has driven substantial growth, with outstanding loan books forecast to exceed £12 billion. For borrowers with time-sensitive or non-standard funding requirements, bridging finance offers a viable alternative to traditional lending — provided it is approached with careful planning and a clear repayment strategy.
