The UK bridging loans market is continuing to expand and is expected to reach around £12.2 billion in outstanding loans this year.
This marks another strong period of growth for the sector, following a record-breaking performance last year when the total value of bridging loans passed £10 billion for the first time.
Demand has remained steady as more borrowers turn to short-term finance to overcome delays and restrictions in traditional lending.
According to Octagon Capital, bridging loans allow property developers and investors to access capital in weeks, rather than months, to bridge the funding gap of a new purchase or renovations with a clear exit. There are under 100 lenders in the UK, with thousands of intermediaries supporting the industry.
Bridging finance growth since the financial crisis
The modern bridging finance industry began to grow rapidly after the financial crisis in 2008. During that period, many high street banks reduced their appetite for risk and tightened their lending criteria.
This made it harder for buyers, developers and businesses to access funding quickly. Bridging lenders stepped in to fill the gap, offering faster decisions and more flexible terms.
Since then, bridging has become a well-established and credible alternative to banks, especially for property-backed borrowing.
Bridging loans as a viable alternative to banks
Today, bridging loans are widely seen as a viable alternative to traditional bank lending. One of the main reasons for this is speed.
Bridging lenders like Maslow Capital can often approve and release funds far more quickly than banks, which is vital when timing is critical.
Borrowers also value flexibility, as lending decisions are usually based more on the value of the property and the planned exit strategy than on strict affordability rules.
What are common reasons to use bridging loans?
There are many practical reasons why people choose bridging loans. They are often used to prevent property chain breaks, allowing buyers to complete purchases while waiting for a sale to go through.
Bridging is also commonly used for auction purchases, where completion deadlines are tight. Homeowners use bridging to buy before selling, while landlords and developers rely on it to fund refurbishments or buy properties that are not suitable for a mortgage.
Businesses also use bridging to raise short-term capital or manage cash flow.
Bridging regulation and market structure
The bridging market is broadly split between regulated and unregulated lending.
Around 50% of bridging loans are regulated, meaning they fall under FCA rules and are usually linked to a borrower’s main residence.
The remaining 50% are unregulated and are typically used for commercial or investment purposes. This balance allows the sector to support both consumer borrowers and professional investors.
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