UK Bridging Loans Market Report 2024

Mintel’s UK Bridging Loans Market Report takes a close look at the UK bridging finance market, including information on bridging loan market size and forecast, as well as analysis of the competitive language and opportunities for growth.

Key Issues Covered in this Report:

Bridging rates have crept up as the Base Rate remains unchanged, but lender competition has maintained demand in the bridging loans market

The bridging finance industry carries a higher risk profile than other forms of lending and this additional risk has been priced into product offerings – particularly as the Base Rate remains at a 16-year high. However, increased lender competition provides borrowers with more choice and some lenders have placed greater focus on asset quality and loan book performance.

Property market stagnation will drive lenders diversification into new lending areas

Despite the industry’s substantial growth over the last decade, it accounts for only a small part of the total UK mortgage lending market. UK Finance expects gross mortgage lending to fall by some 6% in 2024, but it has forecast a slight increase in activity levels in 2025 alongside a modest improvement in affordability.

Speed and flexibility remain key drivers for growth in UK bridging loans market

The range of uses for bridging finance shows how borrowers and homeowners are becoming more aware of bridging’s versatility. Slow loan completion times continue to be a barrier for some transactions and this is where bridging finance can deliver a variety of quick financing options for both purchase and refinance purposes by utilising facilities such as automated valuations, internal solicitors and title insurance options.

Purchase the full report for a complete overview of the UK bridging loans market, including industry structure and comprehensive analysis from Mintel’s industry experts. Readers of this report may also be interested in Mintel’s UK Mortgages Market Report.

Report Scope

The following sectors make up a large proportion of the UK bridging loans market and are quantified in this report:

• Residential – these loans are short-term, interest-only loans generally used to help meet an immediate financial need when dealing in the property market. Applications are often decided on the value of the property and exit strategy, more so than the ability to meet loan payments.
• Commercial – loans that are similar to residential bridging loans but, for these types of loans, the overall use of the property in question has to be above 40% (not an absolute figure) commercial. The exit strategy usually involves refurbishing the property and then selling it or refinancing it onto a traditional commercial mortgage. These loans also cover more general business purposes such as providing working capital, financing tax liabilities, covering short-term cash-flow issues, etc.
• Development – loans that tend to be used by property developers, private builders, individuals, partnerships, limited companies and limited liability partnerships. Funds are typically used to finance improvements to assets that help increase market value and marketability. These loans tend to cover development projects such as extensions, conversions of existing property into flats, and other structural changes.
• Second charge – refers to loans secured by a mortgage/charge that ranks behind the first charge lender: that is, the security provided to the lender ranks second. A second charge loan will generally have a higher interest rate payable to the lhttps://docs.google.com/spreadsheets/d/1pL4WkcEkBv6JjHezx9LGHXI5ful5N9GCqZ3TEDHpljk/edit#gid=422036543ender than a first charge loan. For example, if a £100,000 home has a £50,000 first charge loan, a second charge may be secured against the remaining £50,000.

Meet The Expert

This report is written by Lewis Cone, Associate Director – Financial Services at Mintel. Lewis joined Mintel in May 2013 having graduated from the University of Southampton with a 2.1 BSc (Hons) degree in Economics and writes a range of industrial reports, from occupational health to the house building market.

With property market performance still being challenged by stubborn inflation and a high Base Rate, bridging loans continue to offer a viable alternative for many borrowers looking to complete transactions.

Lewis Cone
Associate Director – Financial Services