Bridging lending in the UK hit new record of £10.3 billion

Bridging finance activity saw a major boost in the final quarter of 2024, with completions hitting a new high of £2.30 billion—up nearly 29% from the previous quarter. This sharp increase contributed to the total loan book growing by 14.4%, reaching a record £10.30 billion. Demand also remained strong going into 2025, as new loan applications rose by 3.9%, totalling £11.30 billion.

Understanding bridging loans

A bridging loan is a temporary financial solution, often used to cover shortfalls between the purchase and sale of property. It’s designed to offer fast access to funds before long-term finance, like a mortgage, is finalised. These loans are commonly used by individuals buying at auction, developers starting refurbishment projects, or landlords managing property transitions.

When are bridging loans used?

Bridging loans are most useful in time-sensitive situations. For example, a homeowner might need funds to secure a new property before selling their current one. Investors and businesses may use bridging finance to renovate a building or to purchase property that isn’t yet mortgageable. It’s particularly popular for auction buyers who need to complete within 28 days.

Rates and costs involved

Bridging loans typically come at a higher cost than standard mortgages. Interest is charged monthly and can range from 8% to 12% annually, depending on the lender, borrower profile, and whether the loan is regulated. In addition to interest, borrowers usually face arrangement fees between 1% and 2%, along with valuation, legal, and sometimes exit fees. Terms usually last from several months up to around 18 months.

Why choose bridging instead of a mortgage or bank loan?

Speed is the key advantage. Bridging loans can often be arranged in just a few days, whereas mortgages and traditional loans involve lengthy processes and more conditions. While bridging is more expensive, it’s a practical solution when time is limited and quick funding is essential. For many, it serves as a vital stopgap when other finance options are too slow or unavailable.

Market size and growth

The UK bridging loan market has typically been valued at around £4 billion annually in recent years. (Source: MT Finance)

The jump to £10.3 billion in 2024 marks a significant shift in demand and confidence in the short-term lending market.

Experts suggest the rise reflects both the growing complexity of property transactions and the need for faster, more flexible funding in today’s market. The rise in average loan size also indicates increased use by higher-value borrowers and commercial clients.

Bridging finance is clearly becoming an increasingly important part of the UK’s lending landscape, offering fast, flexible funding at a time when traditional financing routes remain cautious and often slow to move.

1. https://www.mortgagefinancegazette.com/lending-news/bridging-finance/bridging-loans-reach-new-record-at-10-30bn-24-02-2025/

2. https://www.cliftonpf.co.uk/blog/25012023114704-how-to-find-the-best-bridging-loans/#:~:text=How,Much,-Does%20a%20Bridging