Bridging finance is a short-term, interest-only loan secured against property, designed to "bridge" a funding gap until a longer-term solution or an exit event — such as a sale or refinance — can be put in place. In the UK, bridging loans are used by property investors, developers, landlords and business owners who need to move quickly, often completing within a matter of days rather than the weeks or months associated with a traditional mortgage.
Typical uses
Common uses include purchasing property at auction, refinancing an existing bridge, raising capital against an asset, breaking a property chain, or funding refurbishment and light development works. Loan sizes generally range from £50,000 to £10 million, with terms from one to twenty-four months, and can be arranged on a first or second charge basis across residential, commercial, semi-commercial and land assets.
How a bridging loan works
A bridging loan is not a long-term product. Every case must have a clear, credible exit strategy — for example the sale of the property, a remortgage onto a term product, or the release of funds from another asset. Lenders will assess the security, the loan-to-value ratio, the borrower's experience, and the realism of the exit before offering terms. Interest is usually serviced monthly, or it can be "rolled up" and repaid in one sum at the end of the term.
Costs to consider
As well as interest, borrowers should budget for a valuation fee, legal costs, lender arrangement fees and, where a broker is used, a broker fee. Because bridging finance is short-term and specialist, interest rates are typically higher than a standard mortgage, so the total cost should always be weighed against the benefit of completing quickly.
Regulation
Some bridging loans are regulated by the Financial Conduct Authority, particularly where the security is a property the borrower or an immediate family member lives in. Unregulated bridging loans are available for business and investment purposes. UK Property Bridging, a trading name of The UK Adviser Ltd (FRN 798920), acts as a credit broker and can introduce cases to a panel of specialist lenders, targeting indicative terms within one business day.
Getting started
To get started, gather the key details of your case: the property type and value, the loan amount required, the charge you need, and your exit strategy. Submit these through our enquiry form and our team will work towards indicative terms so you can decide how — and whether — to proceed.