Bridging Finance in the UK sees surge in Demand

Bridging Finance in the UK sees surge in Demand as Developers Face Tight Lending Conditions

UK bridging finance

By Vision Finance – Expert Insight into UK Real Estate Finance

London, UK 
As the UK property market adapts to higher interest rates, slow mortgage processing times, and increased regulatory scrutiny, bridging finance is emerging as a critical tool for property developers and investors seeking speed, flexibility, and funding certainty.

New figures released this quarter show a marked increase in short-term lending activity, with bridging loans surpassing £1.5 billion in origination volume in Q1 alone—an 18% rise compared to the same period last year. This growth reflects a broader trend across the real estate capital markets: traditional lenders are tightening, and borrowers are looking elsewhere to meet aggressive acquisition and development timelines.

Bridging Finance: From Niche to Necessity

Once considered a last-resort option, bridging finance is now firmly mainstream among professional investors and SME developers. The shift is driven by several converging factors:

  • Prolonged mortgage delays: Standard mortgage products are taking 8–12 weeks to complete, pushing buyers toward quicker solutions.

  • Auction purchases and time-sensitive acquisitions: Bridging offers rapid drawdowns—often within 3–5 working days.

  • Chain breaks and refinance exits: Investors are using bridges to maintain momentum when deals stall mid-process.

“We’re seeing a notable shift in sentiment,” says Roshan Doostdar, Director at Vision Finance. “Developers aren’t just using bridging reactively—they’re building it into their strategies as a way to stay competitive and agile in a volatile market.”

Development Finance Under Pressure: Bridging as a Stopgap

Alongside this trend, development finance is also undergoing a transformation. Rising build costs and tighter credit underwriting have made it harder for developers to secure funding on pre-sale or planning-only projects. As a result, bridging is increasingly used to acquire and hold sites pre-construction, or even to fund early-stage works ahead of a full development facility being arranged.

This type of hybrid structuring—blending bridging with longer-term development loans—has become a specialist service offered by capital advisory firms like Vision Finance.

“One of our recent clients needed £2.3 million to acquire and begin light works on a brownfield site while awaiting planning uplift. Traditional banks wouldn’t touch it without full consent. We arranged a flexible bridging facility secured on GDV potential with staged drawdowns. Within 5 months, planning was approved, and we refinanced into a structured development loan at better terms.”

What Investors Need to Know

With the market in flux, investors and developers should be aware of the following:

  • Exit strategy is king: Bridging lenders care less about income and more about how you plan to repay the loan—whether by sale, refinance, or staged funding.

  • Speed ≠ sloppiness: While bridging is fast, lenders are increasingly diligent. Having a prepared legal pack, valuation, and business case ready can shave days off funding times.

  • Rates are rising—but so is opportunity: Even with bridging rates currently ranging between 0.8%–1.2% per month, the ability to secure an off-market deal quickly can more than offset the cost.

The Future of Alternative Finance in UK Property

Looking ahead, market analysts expect demand for alternative property finance to grow steadily through 2025, especially in regional markets and among SME developers priced out by banks.

Bridging and development finance are no longer secondary tools—they’re primary components in modern funding strategies.

As capital advisory experts, Vision Finance continues to work with investors, developers, and introducers to structure bespoke finance solutions that go beyond traditional banking.

Want tailored advice on how bridging or development finance could work for your next project?

Contact our advisory team today on 0207 206 2500 or bridging@visionfinance.co.uk