Borrowers are adapting to the 'new normal' amid ongoing global uncertainty, with bridging lending up by 5% between Q2 and Q3, according to the latest Bridging Trends from MT Finance.
Although this is 13.2% below Q3 2025, the increase from Q2 shows that bridging finance remains a vital tool for those looking to unlock funds.
After the proportion of unregulated bridging loans dropped from 59% in Q1 to 52% in Q2, it rose again in Q3, this time hitting 55% as landlords and investors adjusted to the latest economic fluctuations.
Purchasing an investment asset was the most popular use of a bridging loan in Q3 and made up 23% of transactions, up from 18% in Q2. By using a bridging loan, borrowers can take advantage of a flat market while also giving themselves breathing space to wait for more favourable long-term rates.
This focus on purchases was also reflected in the rise in first charge bridges, which increased from 78% in Q2 to 87% in Q3. As second charge bridges plummeted from 22% in Q2 to 13% in Q3, so too did the amount of heavy-refurb bridges, which fell from 10% in Q2 to 6% in Q3 as building costs remained high.
There was still demand for development bridging though, with Knowledge Bank reporting that it saw the biggest uplift among search terms made by brokers in Q3. It was followed by ‘defaults over £500’ and ‘properties purchased at auction’.
The average LTV rose from 55% in Q2 to 59% in Q3. Despite this increase, the average monthly interest rate fell from 0.81% in Q2 to 0.77% in Q3.
There was further good news for borrowers as the average completion time fell from 46 days in Q2 to 41 in Q3.
Bridging Trends combines bridging loan completions from several specialist finance packagers operating within the UK bridging market: Adapt Finance Group, Brightstar Financial, Brilliant Solutions, Capital B, Clever Lending, Clifton Private Finance, Complete FS, Enness, Impact Specialist Finance, LDN Finance, Optimum Elite and Sirius Finance.
Jordan McBriar, CEO at Adapt Finance Group, commented: “These trends are so typical of the market currently, almost one positive to every negative, but the fact remains that bridging is the perfect tool for making transactions happen. It feels as if confidence is creeping back in and there is a want to make things work, albeit with some challenges.
“Looking at last year’s numbers, especially in terms of quantum, it is a pleasant surprise to see there isn’t the fall off that many people may have expected to see. It is tough out there, but it is also making people focus on delivery, which can only be a good thing for when market conditions improve."
Fergus Allen, head of bridging at Clifton Private Finance, said: “The bridging market appears to be moving towards more investment-led first charge lending, with borrowers benefiting from increasingly competitive rates and higher leverage. At the same time, lenders appear to be completing transactions more quickly. Whether this is due to sustainable market growth or increased competition between lenders is up for debate – my opinion is it’s most likely the latter.”
Raphael Benggio, bridging director at MT Finance, added: “It is really encouraging to see the drop in both completion times and interest rates. This shows that despite the geopolitical landscape, lenders are continuing to support borrowers which helps to drive much-needed momentum. The industry is once again showing its resilience as well as its ability to find solutions and get deals over the line.”
