Bridging finance for buy-refurb-refinance (BRR)

BRR momentum in 2025

Bridging finance has moved centre stage for UK buyers pursuing buy-refurb-refinance. In Q2 2025, total lending held steady at £199.7 million, application volumes rose 11% year on year, and average loan to value sat at a measured 54%. In a volatile market, steady volumes and conservative LTVs point to resilience, with lenders competing harder for quality cases.

Rates continue to soften as competition intensifies. Average monthly pricing dipped to around 0.81% in Q2, with keen quotes edging closer to 0.64% for stronger deals. For homeowners and investors, that reduces carrying costs during refurbishment and makes short holding periods more workable. At the same time, regulated refinance has surged to 18% of loan purposes, and regulated bridging now represents the majority of transactions. The story is simple - speed and certainty are prized when chains wobble, surveys uncover defects, or an auction demands completion inside 28 days.

The sector’s growth trajectory remains robust. Loan books surpassed £10 billion in 2024 and are forecast to reach roughly £12.2 billion by the end of 2025. Broker sentiment is upbeat, with most anticipating further expansion as base rates ease to 4.25% and UK property prices stabilise around the £271,000 mark. Demand is broad: homeowners solving chain breaks, landlords upgrading stock to meet EPC standards, and developers converting offices to residential.

BRR thrives on momentum - buy well, refurb efficiently, refinance quickly. Bridging provides the tempo. Typical completions take about 43 days from offer, exits lean toward property sale or buy-to-let remortgage, and auction purchases now account for a meaningful share of activity. If your plan is tight and your exit clear, the numbers stack up.

“Understanding APR is not just about percentages - it is about knowing what you will pay in real pounds and pence during the months you hold the bridge.”

Is this right for you?

If you are buying a property that needs work, facing a short deadline, or navigating a chain break, bridging can provide swift, flexible capital that a standard mortgage cannot match. It suits buyers who can add value through refurbishment, then refinance to a long-term product or sell at uplifted value. It also works for homeowners who need to buy before they sell.

You should be comfortable running a project to a timetable, with contingency for costs and time. A clear exit strategy - usually sale or a buy-to-let remortgage - is essential. If you prefer set-and-forget finance with lower fees and no time pressure, consider conventional mortgages instead.

Funding routes at a glance

1. Regulated bridging - short-term finance for homeowners or buy-before-sell scenarios.

2. Unregulated bridging - for investment purchases, refurbs and conversions.

3. Auction bridging - tailored for 28-day exchange-to-completion deadlines.

4. Light refurbishment bridge - minor works without structural changes.

5. Heavy refurbishment or development bridge - structural changes or planning risk.

6. Green bridging - pricing incentives for EPC uplift and energy improvements.

7. No-valuation or AVM products - speed-focused offers for suitable properties.

Costs, impact, returns and risks

Who qualifies and what lenders look for

Lenders focus on three pillars: property, borrower and exit. The property must be mortgageable now or after specified works, with a credible schedule and budget. Surveyors will consider condition, comparables and projected end value post-refurb. For the borrower, experience is useful but not mandatory if the team includes a capable contractor and project manager. Clean credit helps, yet some adverse can be considered if the case is strong overall. Proof of deposit, evidence of works funding, and transparent costings are essential.

The exit is non-negotiable. Most exits are sale or buy-to-let remortgage, which currently accounts for roughly one in five cases. If your plan is to refinance, lenders may request an agreement in principle or a clear eligibility path with a mainstream or specialist BTL lender. Timescales matter - if works or planning could stretch the timetable, build in buffer. As a UK-based retail finance broker, Kandoo can map your case to the right lender panel, balancing speed, price and appetite, and coordinate valuation and legal steps so you hit completion dates with confidence.

From application to exit

1. Share property details, budget, timeline and exit plan.

2. Receive indicative terms and choose the preferred lender.

3. Submit documents, valuation instructed, legal due diligence starts.

4. Final offer issued, fees agreed, completion date scheduled.

5. Funds draw down to purchase or refinance the asset.

6. Deliver refurb works, monitor costs and milestones.

7. Execute exit - sale or refinance to long-term mortgage.

Upsides and trade-offs

Before you commit

Interrogate your numbers. Model total costs over the projected hold period, including interest, arrangement fee, legal, valuation and any exit fee. On a £280,000 bridge for six months, the combined cost can sit near 8.6% when interest and fees are included, though precise pricing depends on the case. Stress test your end value against conservative comparables and assume slower sales velocity. If your exit is a buy-to-let remortgage, check rental cover, stress rates and product availability with current lender criteria.

Build time contingency and an alternative exit. If works overrun or a buyer falls through, you may need an extension or refinance. Auctions are unforgiving - ensure legals are reviewed early and that the property is mortgageable post-works. Where planning is involved, validate timescales and conditions. Keep paperwork clean - lender-ready documents speed completion and reduce surprises.

Alternatives if timing is flexible

1. Standard residential or buy-to-let mortgage with retention for light works.

2. Second charge loan secured against existing equity.

3. Development finance for heavier structural projects over longer terms.

4. Joint venture equity to reduce leverage and risk.

5. Remortgage your current home to release deposit or works funds.

Frequently asked

Q: How quickly can a bridging loan complete? A: Many cases complete in four to six weeks from offer, helped by streamlined legals and responsive valuation. Auctions may still require faster preparation.

Q: What rates should I expect in 2025? A: Market-average pricing has drifted towards roughly 0.81% per month, with sharper quotes around 0.64% for lower-risk cases, reflecting strong lender competition.

Q: What loan-to-value is realistic? A: Average LTV sits near 54%, though up to about 75% is achievable for well-presented cases with clear exits and strong borrower profile.

Q: What are typical exits for BRR? A: The most common exits are property sale, around three quarters of cases, and buy-to-let remortgage at roughly one in five. Choose the exit that best aligns with your goals.

Q: Is regulated bridging only for chain breaks? A: It is ideal for buy-before-sell and chain breaks, but regulated refinance has also surged as homeowners use bridges to transition quickly into long-term mortgages.

Q: Do lenders fund refurb works? A: Yes. Many offer staged drawdowns for verified works, particularly for light to medium refurbishments. Heavier works may require development-style monitoring.

Q: What happens if my exit is delayed? A: Speak to your broker early. Extensions or refinance may be possible, but factor in additional costs and ensure your timeline buffer is realistic from the outset.

How Kandoo helps

Kandoo is a UK-based retail finance broker that matches your BRR plan with lenders offering the right mix of speed, price and flexibility. We streamline valuations and legal work, negotiate competitive fees, and keep your timeline on track so you can focus on the refurb and your exit.

Next steps:

• Share your deal and budget for indicative terms today.

• We shortlist lenders and timelines within 24-48 hours.

• Progress to valuation and legals on your chosen route.

Important information

This article provides general information only and is not personal advice. Bridging loans are secured against property and may be repossessed if you do not keep up repayments. Terms and eligibility depend on your circumstances and lender criteria.