Bridging Finance Industry Reaches Record Levels of £10 Billion

What Is Bridging Finance and When You Would Use It

Bridging finance (or bridging loans) is a form of short-term borrowing used to “bridge” a gap between payments or to provide quick capital before a more permanent funding source is arranged. 

Typically, people use bridging loans when they need to act quickly — for example when buying a property at auction, or when a sale of a current property has not yet completed yet another purchase must go ahead. 

Developers might use bridging finance to buy land or start refurbishment works, landlords might use it to fund light refurbishments or to buy before they have sold an existing property. Businesses might also use it to meet urgent cash flow needs or tax liabilities.

The advantages of bridging loans are speed, flexibility, and fewer of the usual strict requirements that banks apply. 

Bridging finance often focuses more on the value of the property or asset and less on the borrower’s full credit history. They also have shorter terms, and repayment might come from selling the property, refinancing, or other exit strategies.

Why Has Bridging Finance Grown in Recent Years

There are several reasons why the bridging finance market has expanded so strongly. One reason is that traditional banks have tightened their lending criteria. 

Due to stricter regulation by the FCA, rising interest rates, and economic uncertainty, many borrowers find it harder to meet the usual mortgage requirements. In contrast, bridging lenders are more flexible about credit history or income, as long as there is a good exit plan and sufficient asset value.

Another reason is the speed of funds. Buying at auction, preventing chain breaks in house sales, or acting quickly when property deals come up demand rapid funding. 

Bridging finance can often be arranged much more quickly than a standard mortgage — sometimes weeks rather than months. 

The average time to complete a bridging loan has improved, falling from 58 days in 2023 to about 47 days in 2024.

Also, more people have become aware of bridging as a useful tool, not just as a last resort. Both residential and commercial users now tend to use it in more varied ways. This has increased demand. Brokers and lenders report greater enquiries, more diverse product types, and stronger competition.

How Many Bridging Lenders and Brokers Are in the UK

The exact number of bridging lenders in the UK is not easy to fix, because there are regulated and non-regulated providers, specialist lenders, and smaller private firms. 

Estimates suggest there are somewhere between 200 and 400 different players in the UK bridging market.

On the broker side, usage is high. One survey showed that about 64 per cent of people who were funded used a bridging loan broker, and nearly all of those said they would use a broker again. Brokers help borrowers understand the options, compare rates, and navigate the regulations.

Will the Bridging Industry Continue to Grow?

All the signs point to further growth, though not without challenges. Many brokers are optimistic: in a recent survey, 72% of intermediaries believe the bridging market will grow in 2025, with about 10% expecting high growth. 

There is also projected increase in different types of bridging loans — residential, commercial, development exit, auction purchases — as usage broadens.

However, there are risks. Rising interest rates, regulatory changes, and macroeconomic uncertainty could slow demand. Also, because bridging loans often have higher risk (shorter terms, fallback depending on property values), lenders may become more cautious or tighten terms again. If the economic climate worsens, defaults may rise.

Even so, with loan book values already above £10 billion and projections pointing toward £12.2 billion by end 2025, the industry looks likely to keep expanding, particularly as standard mortgage markets remain slow or restrictive for many borrowers. The increasing number of lenders and brokers, faster completions, and rising awareness among borrowers all contribute to a solid outlook for continued growth.