Value of UK regulated bridging finance rises in the past year – over £1.8bn in new loans written

• Delays in arranging sales lead owner-occupiers to use bridging finance to push purchases forward

Bridging loans are becoming ‘a key tool’ to unlock property purchases in stalled chains

Unregulated bridging has typically been used for a number of years by property investors and developers who use unregulated bridging loans for development projects, to exit development finance, auction purchases and to refurbish new buy-to-let properties. Unregulated bridging loans aren’t regulated by the Financial Conduct Authority (FCA), whereas regulated bridging loans are.

We are now seeing the value of new regulated bridging loans taken out by homeowners in the UK has jumped to £1.83bn* in the year to March 31, 2026, up from £1.75bn in the previous 12 months, our latest research shows.

Francesco Amato, Senior Associate – Specialist Regulated Finance at Karis Capital, says that the rise in the value of regulated bridging finance has partly been driven by the increase in owner-occupiers looking to avoid lengthy delays in property chains.

Rather than be forced to wait many months for other properties in the chain to sell, more buyers are now choosing to borrow in the residential bridging loan market to purchase their new property while waiting for a better opportunity to sell their current property.

Once they have sold their residential property, they can repay the existing bridging loan and refinance onto a long-term mortgage.

Breaking the chain and exit strategies

Using a bridging loan allows borrowers to ‘break the chain’ when an unpredictable housing market makes it difficult to sell an existing property before buying another. As speed is key with this type of finance, most lenders typically provide terms within 24 hours of receiving full client information. Regulated bridging loans are processed much faster than residential mortgages.

Lenders provide regulated bridging finance on a short-term basis; repayments on a regulated bridging loan are different to a traditional mortgage. You will typically see regulated bridging loans have shorter payback periods of a few months, and the maximum term is often up to 12 months.

Bridging lenders require the borrower to have a clear exit strategy to pay back the loan as they carry no monthly payments. Borrowers’ exit strategies for regulated bridging finance tend to come in the form of a refinance onto a traditional mortgage once their previous primary residence has sold.

Other uses for Regulated Bridging Finance

As well as being used as a tool in a property chain break and to complete on their residential property transaction more quickly, a regulated short-term loan can also be used to:

• Buy ‘probate properties’ where family members are seeking a quick sale of a house inherited from a relative
• Allow someone to buy out their ex-partner from a property in a divorce
• Purchase a property that is currently not suitable for a mortgage from a high street bank, due to unfinished renovations or damage
• Finance a major renovation, before refinancing with a high street lender after the build is complete

Short-term finance provides an alternative route for buyers

Says Francesco Amato: “In a property market that is being slowed for the moment by fluctuating interest rates, bridging loans give some buyers a different route to get their property purchases completed.”

“While bridging finance won’t be suitable for everyone, as they carry higher interest rates due to the short span of the loan”

“However, it’s an option that allows buyers in some situations to move their purchases forward when a conventional mortgage isn’t suitable. With the right exit plan, they are an important tool for property buyers.”

* Source: Financial Conduct Authority, regulated bridging loans

How can Karis Capital help?

Francesco has nine years’ experience in finance and specialises in regulated residential property transactions. Franco regularly assists clients who may struggle to secure a standard residential mortgage, including high net worths, foreign nationals, property investors, and those with complex income streams or adverse credit history. He helps them secure the funds required to buy their dream home. He also delivers a valuable service for property developers who are looking to provide their buyers with mortgages to purchase at the exit stage of a scheme.

If you’re considering a bridging loan to move forward with a purchase or fund a renovation, get in touch here to discuss your options.