The value of new 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, shows new research by Karis Capital, a leading specialist real estate debt and insurance advisory firm.
Francesco Amato, Senior Associate – Specialist Regulated Finance at Karis Capital, says that the rise in the value of regulated bridging loans 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 bridging loan market while waiting for a better opportunity to sell their existing properties.
Once they have sold the property they can repay the bridging loan and refinance on to a long-term mortgage.
Bridging loans allow borrowers to ‘break the chain’ when an unpredictable housing market makes it difficult to sell an existing property before buying another. Lenders provide this finance on a short-term basis, usually between a few weeks and 12 months, so long as the borrower has a clear exit strategy to pay back the loan.
As well as being used as a tool to fix a broken residential property “chain” and complete a property purchase more quickly, regulated bridging loans 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
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 a bridging loan won’t be suitable for everyone, 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
