"More investors are waking up to the modern uses of bridging finance, which can be an effective tool in snapping up an investment property"
- Jonathan Samuels - Octane Capital
Bridging loans are playing an increasing role in property investment activity, particularly for completing purchases and securing properties bought at auction.
New analysis from specialist lender Octane Capital reveals how investor use of bridging finance is evolving. In the first quarter of 2025, 23% of bridging cases were used to fund investment purchases. This marks a notable rise from 13% in the final quarter of 2024 and a small increase from 21% during the same period last year.
The second most common reason for using bridging finance was to manage a chain break, accounting for 17% of cases. This typically occurs when borrowers need funds to buy a new home while waiting for the sale of their existing property to complete.
Auction purchases ranked third, representing 12% of usage, underlining how bridging loans are being deployed for fresh acquisitions rather than just refinancing existing assets.
Market activity remains high despite small dip
Despite the growing range of uses, total bridging loan volumes dipped slightly at the start of the year. In Q1 2025, lending totalled £202.0m, down -0.7% from £203.5m in the final quarter of 2024.
However, activity remains higher than a year ago. In Q1 2024, bridging lending stood at £196.2m, marking a 3% annual increase. Comparisons with earlier years show even sharper growth, with lending volumes at just £122.9m in Q1 2020.
These figures reflect a sector that, while prone to quarterly fluctuations, is expanding steadily over the long term.
Loan processing times improve
Application turnaround times across the bridging market are continuing to fall, suggesting operational efficiencies are improving.
On average, it took 32 days to complete an application from start to finish in Q1 2025. This compares with 39 days in Q4 2024 and 58 days in the same period last year.
“More investors are waking up to the modern uses of bridging finance, which can be an effective tool in snapping up an investment property,” said Jonathan Samuels, chief executive officer of Octane Capital. “Maybe you need the finance to secure a quick purchase before a competitor swoops in, or perhaps it’s about using the funds to refurbish the property before refinancing with a buy-to-let loan. Either way, the industry is increasingly set up to meet investors’ needs, which is demonstrated by the shorter processing times when it comes to taking applications to completion.”
