Applications for bridging loans in the UK are smashing records. The latest data from the Bridging & Development Lenders Association (BDLA) shows 2025 has started strongly for the sector.
The first quarter saw bridging loan completions reach £2.8 billion – matching the record set in the final quarter of 2024.
Data from the BDLA show that there’s no slowdown in the momentum for bridging loans and the data has even surprised the sector’s leaders.
Vic Jannels, the BDLA’s Chief Executive, said: “Q1 is traditionally the quietest quarter of the year, so to maintain the record completion levels seen in Q4 2024 is a strong indicator of continued resilience in the market.”
Last year’s record-breaking year – where £9 billion of bridging loans were arranged – are could be beaten this year.
There are a number of factors for the surge in bridging loans. This includes rising property prices, buyers needing quick access to funds and the competitive housing market.
As housebuilding slows to its lowest level in almost a decade, the price increases are likely to continue and that will mean bridging loans will remain popular as buyers are keen to access funds to secure their new property.
But what else fuels the popularity of bridging loans?
What makes bridging loans popular?
Speed to access funds
Bridging loans can be arranged rapidly. According to the BDLA, it took on average 38 days to arrange a bridging loan in the last quarter of 2024. This makes them the perfect solution for those buyers who need to make quick decisions to take advantage of the market. For example, buying properties that are not habitable and require work. Auctions properties are just some of those where buyers need quick access to funds.
Different lending criteria
Bridging lenders are more concerned about asset value and the exit strategy than your credit history. Of course, they will make checks about your finances and if you cannot afford a loan, they won’t offer you one, however, the lenders are not bound by the same approval processes as traditional ones. Bridging lenders can often be more flexible and investors can borrow against properties that mortgage lenders would baulk at. Also, they are more likely to look favourably at complex plans that traditional lenders would turn away from.
Perfect for strategies that add value
Exit strategies are important when it comes to bridging loans. We’ve explored why in an earlier blog. One of the most popular strategies is to redevelop a property or a plot of land and sell it on quickly. Such strategies make bridging loans very popular due to their short-term nature. Once the value has been enhanced, investors can refinance using a more traditional loan or release the equity for the next project.
Cost effective finance
Bridging loans can be more cost effective. You will pay higher interest rates than a traditional loan, such as a mortgage but the term of the loan is shorter. That means investors who want to buy, repurpose a property and sell quickly can find it financially prudent to choose bridging loans. There are options to roll-up interest, retain payments and take advantage of more flexible terms. Being more flexible means bridging loans are perfect for investors.
Giving breathing space
Many people use bridging loans when they are buying a property but their current home is still unsold. Latest figures show almost 29% of property deals fell through in 2024 before completion. That shows why bridging loans are becoming more popular. If you are in a chain and don’t want to lose your new property should the chain collapse, a bridging loan can give you breathing space so you don’t lose out. Don’t forget, that they are short-term loans and you’ll need an exit strategy. In these cases, that will be to pay the loan and the interest as soon as your current home is sold.
Can I access a bridging loan?
If you have a property to redevelop and think a bridging loan is better for you than a traditional loan, then contact our team today.
