The latest Bridging Trends data shows bridging lending in the UK stayed steady in the first quarter of the year, showing that demand for short-term property finance remains stable despite wider economic uncertainty.
The data shows that buying investment properties is still the most common reason people use bridging loans. It accounted for 22% of all activity, the same level as the previous quarter, showing no change in buyer behaviour.
Overall lending activity also remained stable, with around £199 million in bridging loans completed during the quarter—almost identical to the previous period.
One clear shift is that more lending is now happening through unregulated products, which rose to 59% of the market. This is the highest level seen in several years.
At the same time, most bridging loans were first-charge deals, rising to 91% of all lending. This suggests borrowers are increasingly using bridging finance for straightforward property purchases rather than more complex projects such as distressed properties or finance for probate.
Demand for higher-risk uses, such as heavy refurbishment work or business funding, has fallen. These areas now make up a much smaller share of the market compared with earlier periods.
Loan sizes were slightly more cautious too, with average loan-to-value levels dropping. Interest rates also edged down a little, while the average loan term stayed at around 12 months.
Completion times for loans changed only slightly, showing the market is operating at a consistent pace overall.
Industry experts say the market is currently in a more stable, careful phase. Borrowers and lenders are focusing more on lower-risk deals and clear exit strategies, rather than aggressive growth or complex developments.
Bridging and commercial director at Brilliant Solutions, Sonny Gosai, said that Q1 highlighted “a bridging finance market that remains resilient and increasingly selective”.
“While contributor gross lending held firm at nearly £200m and first charge lending continued to dominate, the data shows borrowers prioritising speed, security and investment-led opportunities,” Gosai commented.
“Investment purchases remained the leading use of bridging loans, while demand shifted away from heavy refurbishment and business-purpose borrowing, reflecting a more cautious but opportunity-driven market landscape.”
Sales director at Knowledge Bank, Shane Chawatama, added: “These search trends within bridging highlight a clear shift in investor behaviour.
“Together, these trends point to a market that is becoming more strategic, but also one that must navigate the ongoing challenges of upgrading existing housing stock, particularly in the context of evolving EPC requirements and regulatory pressures.”
In total, £199.2m in bridging loans was transacted by Bridging Trends contributors in Q1, a slight change from Q4’s £199.9m. The average loan-to-value (LTV) fell from 56% in Q4 to 52% in Q1, while at the same time the average monthly interest rate also dropped, going from 0.83% in Q4 to 0.82% in Q1.
The average term for a bridging loan remained 12 months and the average completion time rose slightly, from 52 days in Q4 to 53 days in Q1.
CEO at LDN Finance, Chris Oatway, commented: “The market is clearly favouring lower-risk transactions, with borrowers and lenders alike prioritising straightforward acquisition and refinance deals over heavier refurbishment projects where construction costs, programme delays and sales tail risk create greater exposure.”
Bridging director at MT Finance, Raphael Benggio, added: “Investors and landlords in particular seemed to be maximising bridging’s potential in Q1 and the dip in LTV shows that borrowers were careful about not overburdening themselves.
“We will have to wait and see to get a real measure of how the conflict in Iran has affected the market but the bridging sector will continue to offer solutions to landlords, business owners and homeowners alike.”
