The UK bridging finance and development lending market entered 2026 in a more measured phase, following a sustained period of growth and amid continued economic and geopolitical uncertainty, according to the latest quarterly data from the Bridging & Development Lenders Association (BDLA).
The Q1 2026 figures show activity moderated across applications, completions and loan books compared with the final quarter of 2025. However, the BDLA said the data should be viewed against the backdrop of the market’s rapid expansion in recent years, a more cautious wider property finance environment, and a sector that continues to benefit from strong underlying confidence, disciplined underwriting and established demand for flexible short-term funding.
While activity softened during the first quarter, the BDLA said the bridging finance market remains fundamentally well-positioned. Lenders are continuing to take a prudent approach to risk, while capital providers are placing greater emphasis on governance, transparency and proven track records.
In the three months to 31 March 2026, completions totalled £1.8 billion, down from £2.5 billion in Q4 2025. Applications reached £9.9 billion, compared with £11.7 billion in the previous quarter, while total lender loan books stood at £11.5 billion.
Average loan-to-value ratios fell to 56.64%, from 58.64% in the previous quarter
Development lending totalled £276.5 million, down from £420.3 million in Q4 2025
Second charge lending stood at £131.3 million, down from £145.8 million
The reduction in average loan-to-value ratios reflects a continued focus on responsible lending and a more measured risk appetite across the sector. The BDLA’s quarterly data survey is compiled by independent auditors using figures submitted by lender members, providing one of the most comprehensive snapshots of activity within the UK bridging and development lending sector.
“After a sustained period of strong growth, it is not surprising to see the market move into a more measured phase,” said Adam Tyler, chief executive of the BDLA (pictured)
“The first quarter of 2026 has been shaped by a number of wider economic and global factors, and these have inevitably influenced confidence and activity across the property and mortgage sectors.
“However, the bridging and development finance sector remains in good shape, with strong foundations, experienced lenders and a clear role to play in supporting borrowers who need flexible, time-sensitive funding solutions.”
He noted that the wider mortgage market has faced a difficult year. “Across the wider mortgage market, the last 12 months have been challenging. Brokers, lenders and borrowers have all had to navigate uncertainty around rates, property values, transaction volumes and the broader economic outlook. In that context, some cooling in activity was expected.”
Tyler pointed to the continued professionalism of the sector as a source of confidence. “What gives us confidence is the continued professionalism of the sector. Lenders are being disciplined in their underwriting, capital remains available for high-quality lending platforms, and there’s a growing focus on governance, transparency and sustainable growth.”
He added that the market is maturing, even if growth slows at times. “The market is also becoming more mature. That means growth will not always be linear, but the long-term direction of travel remains positive.
“Bridging and development finance is now an established and essential part of the UK property finance landscape, the BDLA will continue to support the standards, data and representation needed to ensure the sector grows responsibly, and BDLA membership continues to provide a badge of quality for others to follow.”
