Bridging finance lending rose 5% in the third quarter as landlords prioritised investment purchases, according to the latest Bridging Trends data from short-term lender MT Finance.
Contributors to the quarterly report completed £181.8m of bridging loans in Q3, up from £173.1m in Q2, though still about 13% below the £209.4m recorded in Q3 2025.
Bridging Trends suggests more borrowers are adapting to a ‘new normal’ amid continued global uncertainty. The increase on Q2 shows that bridging finance remains a vital tool for those looking to release funds.
The report combines completions from 12 specialist finance packagers: 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. It uses the FCA’s definition of a bridging loan, a contract with a term of 12 months or less, and takes broker search data from Knowledge Bank.
“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,” said Jordan McBriar, chief executive of Adapt Finance Group. “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.”
Bridging shifts towards investment buying
Unregulated loans made up 55% of lending, after the proportion dropped from 59% in Q1 to 52% in Q2 as landlords and investors adjusted to economic fluctuations. Buying an investment asset was the most popular use of a bridging loan, accounting for 23% of transactions against 18% in Q2. Borrowers could take advantage of a flat market while giving themselves breathing space to wait for more favourable long-term rates.
The focus on purchases also showed in first-charge bridges, which rose from 78% of lending in Q2 to 87% in Q3. Second-charge bridges fell from 22% to 13%, and heavy-refurbishment bridges dropped from 10% to 6% as building costs remained high. Demand for development bridging persisted, however. Knowledge Bank reported its biggest uplift among broker search terms in Q3, ahead of ‘defaults over £500’ and ‘properties purchased at auction’.
Average loan-to-value (LTV) rose from 55% in Q2 to 59% in Q3, yet the average monthly interest rate fell from 0.81% to 0.77%, its fourth consecutive quarterly decline. The figures point to ample liquidity and competition among lenders, and let borrowers raise more while keeping costs manageable.
“The bridging market appears to be moving towards more investment-led, first-charge lending, with borrowers benefiting from increasingly competitive rates and higher leverage,” noted Fergus Allen, head of bridging at Clifton Private Finance.
“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.”
Average completion time fell from 46 days in Q2 to 41 days in Q3 as processes became more streamlined and lenders worked to meet clients’ deadlines. The average term was held at 12 months.
“It is really encouraging to see the drop in both completion times and interest rates,” commented Raphael Benggio, bridging director at MT Finance. “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.”
