Borrower Tips
The UK bridging market is currently estimated to be worth a hefty £13.7 billion, as more property investors take advantage of the speed and flexibility of bridging finance.
Whether used as temporary liquidity or funding an entire property project, bridging finance is now a go-to financial solution across the industry.
Read on for bridging loans explained in simple terms, including how they work, when they can be used and their risks and benefits. Enabling you to explore all the finance options available for your next project and navigate the loans process smoothly.
A bridging loan is a short-term secured loan, typically up to 24 months, paid back with interest and commonly used in UK property transactions.
They can alleviate temporary funding gaps between buying and selling/refinancing property. A key feature of bridging loans is the speed at which they can be arranged; in some circumstances, it can take just a matter of days.
Bridging loans can also finance quick turnaround property projects, such as ‘fix and flip’ projects, fund land acquisitions, or facilitate a development exit.
Secured against the property being purchased and/or additional assets, in the event of a default, the bridging loan lender can repossess these assets.
Unlike homeowner mortgages, bridging loans are assessed against the asset values, the strength of the project/investment and the exit strategy (how the loan is repaid), rather than income and affordability.
Interest is typically charged daily and rolled-up, so at the end of the loan term, you pay back the amount borrowed plus the accrued interest. If a lender charges interest monthly, you’ll be charged for the entire month even if you exit part way through. Some lenders offer monthly servicing (pay the interest each month) but it’s not that common. Bridging loan interest rates depend on:
Lenders assess the exit strategy through various layers of due diligence, such as independent valuations, market comparable research, quantity surveyor report on the project (if applicable), and borrower credit profile.
Examples of a strong exit strategy would be having a fixed date for a property sale completion, or having a mortgage in principle for a refinance.
Bridging loan underwriting is primarily asset-led, not income-led, with lenders focusing on whether the property provides sufficient security and whether the exit strategy is credible and time-bound.
While most lenders do not require proof of income in the way a residential mortgage does, assessing a borrower's credit profile will still be part of the application process. If your exit is to refinance, but you have a CCJ or poor credit history, securing a mortgage can be difficult, making it problematic for bridging lenders to accept your exit.
Risk appetite varies significantly between lenders. Some will lend on non-standard properties (mixed-use, short leases, refurbishment), while others restrict lending to straightforward residential assets at lower LTVs. Borrower experience also matters: seasoned investors may access higher leverage or flexible terms due to proven delivery.
There is no specific typical amount for bridging loans. Lenders on the Brickflow platform offer bridging finance across a vast scale, stretching from £25,000 up to £350 million.
The loan amount will depend on the value of the asset/assets, the amount of deposit input from the borrower and the lender’s LTV (Loan to Value) caps.
Bridging finance is widely used beyond residential purchases, particularly for commercial and development-led transactions.
Typical scenarios include:
Assessment differs from residential lending because decisions are based on asset value, commercial demand, and the exit timeline, not personal income. Lenders analyse lease terms, market rents, planning risk, and resale liquidity.
Read more about commercial bridging loans here.
While monthly income and outgoings don’t play a huge part, there are still certain bridging loan criteria that borrowers need to meet to get a loan.
Basic criteria include being aged 18+, a UK resident with proof of address and ID, and employed / self-employed / retired.
Loan approval is always down to lender discretion, so even if all criteria are met, there are other factors that can influence a lender’s decision, including:
Full eligibility criteria is explained here: Who Can Get a Bridging Loan? Eligibility and Criteria.
Borrowers typically access bridging finance through one of three routes:
Bridging loan pricing is not inherently cheaper or more expensive through any channel. Rates and terms are driven by risk, leverage, asset quality, and exit certainty, not how the loan is accessed. However, Brickflow enables you to shop the breadth of the market and source all deals available for your needs which inevitably leads to cheaper, or better funding.
If you think a bridging loan is the right option:
Bridging lenders are equipped to process loans quickly, with the typical timeframe from application to loan drawdown being 2-4 weeks. Loans can be completed in a few days when lenders use Automated Valuation Models (AVMs), or ‘desktop valuations’, and forgo legal searches in favour of title indemnity insurance. Lenders typically only use this when lower leverage is requested and there is little to no renovations to be done.
The typical loan term for bridging finance is 1 – 24 months for unregulated bridging loans, and up to 12 months for regulated bridging loans. (Regulated bridging loans, explained in short, are where the loan is secured against the borrower’s or their immediate family’s main home or a property that they will use as their home in the future).
On Brickflow, some lenders offer terms up to 30 or 60 months, though these are less common and only apply in certain circumstances.
Some common examples of bridging loan uses case:
Property chain breaks: If one buyer or seller pulls out of a property chain, bridging finance can enable the purchase of the new home to continue before the completion of the sale of your existing home.
Buying at auction: When buying at auction, you are typically required to pay a 10% deposit upfront and complete the purchase within 28 days – traditional finance can’t meet this short timescale.
Acting fast: Prime sites at good prices will naturally attract many buyers. With a fast bridging loan, you can act as a cash buyer to secure a faster sale and pip the competition.
Renovation projects: Smaller-scale projects that don’t require planning permission can be funded with refurbishment bridging.
Buying land: Funding a land purchase can be pretty difficult using traditional financing routes. Planning bridging can facilitate the purchase of a site with or without planning and partially cover associated pre-construction costs involved in property development.
Often, bridging loans are explained as a temporary funding solution in between buying and selling property. However, they can be far more pliable and used for a myriad of property transactions.
Bridging loans explained without covering potential downsides can’t help you make informed finance decisions. In addition to understanding the benefits and how to use bridging finance, there are risks to be aware of.
Below is an overview of the upsides and downsides involved, but you can read more in-depth about the pros and cons of bridging loans here.
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Pros |
Cons |
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Creates market opportunities |
Short-term only |
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Can complete quickly |
Higher interest rates and fees compared to traditional borrowing |
|
Interest deducted upfront or paid on loan redemption, beneficial for borrowers with low disposable income |
Compounded interest, so interest is paid on interest |
|
Typically no exit fees or early repayment charges |
Higher default interest rates if the loan is not repaid by the end of the term |
|
Available for residential, commercial, land, properties that don’t qualify for traditional mortgages |
Requires a personal guarantee (if borrowing through a corporate entity), leading to personal liability for the debt |
|
Unregulated options provide lender flexibility and faster arrangement, whilst regulated bridging enables borrowing for your own home |
Regulated bridging can take as long as a residential mortgage to arrange due to more stringent criteria and bureaucracy |
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Applications focus on property value, project viability, and securing assets, so poor credit, low income, or cash flow issues are less of a barrier to approval |
Potential repossession of assets in case of default |
Brickflow’s bridging loan calculator offers the quickest, most efficient way to shop the breadth of the bridging loan market, delivering real-time loans from a network of trusted lenders, from banks, non-banks and specialist lenders.
Knowing your borrowing costs up-front is game-changing for any property investor or developer, as it prevents you from pursuing projects with a profit margin that is too small or altogether unviable.
Our award-winning tech, combined with a specialist broker, can help you to secure the best loan on the market quickly and easily.
Now that you know all about bridging finance, it’s easier to understand how they work and how they could benefit your next property investment.
To determine what bridging loans are available for your next project, run your numbers though Brickflow’s bridging loan comparison tool. It takes seconds and could save you tens to hundreds of thousands of pounds.
For bridging loans explained in more detail, you can read our other articles:
Interest rates for bridging loans vary depending on several factors:
The quickest and most accurate way to find out how much interest you will pay on a bridging loan is to run your numbers through Brickflow’s live bridging loan calculator. It takes seconds and enables you to see actual interest rates and charges on loans from across the market.
Discover the costs of bridging loans in our detailed guide. Learn about interest rates, fees, and factors affecting the overall cost of your loan.
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