Bridging finance for commercial property

Why speed and certainty matter in 2025

Bridging finance gives UK buyers and developers a practical way to move quickly when conventional lenders cannot keep pace. The market has strengthened through 2025, supported by lower average monthly rates and faster completions that help transactions stay on track. Gross lending climbed to £209.4 million in Q3 2025, a 4.9% rise on Q2, while completion times shortened by around a week, signalling both demand and improved execution. For investors facing tight timetables, that combination of speed and capacity is crucial.

Costs have eased too. Average rates fell to around 0.81% per month in Q2 2025, the lowest in over a year, alongside an 11% annual rise in applications. Real-world delivery remains brisk: many bridges complete in roughly 43 days from offer, far quicker than most high street processes. Average loan-to-value sits near 53%, balancing access to capital with prudent risk. Exits are clear in most cases, with property sales accounting for roughly three quarters of redemptions, and buy-to-let remortgages a meaningful secondary route.

Investor behaviour is shifting. Investment purchases increased to about 23% of bridging use in early 2025, suggesting landlords and companies are selectively expanding portfolios despite wider economic uncertainty. Regulated refinance has also grown to around 18% of cases, reflecting demand from homeowners and developers restructuring finance, often linked to office-to-residential conversions and refurbishment.

Behind the headlines, the direction of travel is consistent. The UK bridging loan book exceeded £10.3 billion in 2024 and is forecast to reach around £12.2 billion by end-2025. That scale gives borrowers a broader choice of lenders and niches, from light refurbishment to development exit funding. The appeal is straightforward: speed, flexibility, and the ability to act decisively on opportunities such as auctions, chain breaks, or below-market purchases. Used well, bridging can be the difference between securing a property and missing out.

A broker can help you compare true total cost, assess feasibility, and structure a credible exit before you apply. That means identifying the right LTV, rate, and term for your strategy, ensuring valuation expectations are realistic, and planning for potential delays. Understanding APR is helpful, but the practical question is simpler: what will you pay in real money, over what period, and how robust is your repayment route? With those answers, bridging becomes a measured tool rather than a gamble.

Who benefits from this type of funding

Bridging suits UK buyers and businesses that need to complete quickly or unlock value through refurbishment and change-of-use. If you are purchasing at auction, acquiring mixed-use premises, or converting commercial assets to residential under permitted development, a short-term bridge can provide the certainty needed to exchange and complete on time. Landlords expanding portfolios, owner-occupiers relocating, and developers finishing schemes ahead of refinance are common users.

It can also support chain-break purchases, probate and time-limited opportunities, and scenarios where a high street lender will not meet deadlines. For homeowners, regulated bridging may help when buying before selling. For investors, unregulated bridging can fund light works, lease re-gears, or planning gains that boost longer-term value.

Practical routes you can take

1. Auction purchase with tight completion deadline.

2. Buy-before-sell for chain breaks and upsizing.

3. Light refurbishment to improve lettability and valuation.

4. Heavy refurbishment or reconfiguration of commercial units.

5. Commercial-to-residential conversion under permitted development.

6. Development exit to release capital while marketing units.

7. Portfolio acquisition or refinance to seize a discounted deal.

8. Second charge bridge to unlock equity without disturbing a low-rate first.

What it costs and what it could deliver

The real metric is net profit after finance, fees, and contingency - not just the sticker rate.

Can you qualify and what lenders look for

Eligibility is broader than many expect, but it is not unconditional. Lenders focus on the asset, the borrower’s track record, and the clarity of the exit strategy. For purchases, you will typically need a minimum deposit to meet LTV requirements, often around 50% to 70% maximum LTV depending on property type and condition. Clean legal title and a realistic valuation are fundamental. Where refurbishment or conversion is planned, a clear scope of works, itemised budget, timeline, and planning status help demonstrate feasibility.

Income and credit history matter, but minor issues are not always prohibitive if the security is strong and the exit is credible. For regulated bridging, affordability checks are more rigorous, especially when the borrower’s home is involved. Unregulated cases lean more heavily on asset value, experience, and the business plan. Professional input from surveyors and solicitors is essential to keep timelines tight.

As a UK-based retail finance broker, Kandoo can help you compare lenders side by side, test different LTVs and terms, and package a compelling application that anticipates underwriter queries. That includes coordinating valuation, legal work, and evidence for the exit plan, whether by sale, buy-to-let remortgage, or commercial refinance.

From enquiry to funding - the moving parts

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

2. Receive indicative terms and refine loan structure.

3. Submit application with documents and project summary.

4. Valuation instructed; legal due diligence begins promptly.

5. Lender issues formal offer after underwriting review.

6. Sign documents; funds released to your solicitor.

7. Complete purchase or refinance and commence your works.

Weighing it up at a glance

Key checks before you commit

Before you proceed, pressure-test the exit. If the plan relies on a sale, consider time on market and realistic pricing under different scenarios. For remortgage exits, confirm achievable rental income, lender criteria, and stress tests in advance. Build in contingency for works, valuation variance, and legals. Allow for the full cost picture, including arrangement and exit fees, legal bills, monitoring, and interest roll-up.

Review title, leases, and planning constraints early. Clarify whether the bridge is regulated and what that means for affordability and consumer protections. Finally, prepare for a faster pace than traditional mortgages: responses to valuer and solicitor queries within hours, not days, can materially shorten completion. Good preparation reduces cost and risk.

Alternatives that might suit your goals

1. Commercial mortgage for long-term hold at lower rates.

2. Buy-to-let mortgage for stabilised residential investments.

3. Development finance for ground-up or heavy construction.

4. Secured business loan against trading assets or equipment.

5. Mezzanine finance to boost leverage on experienced schemes.

6. Joint venture equity for risk-sharing on complex projects.

Frequently asked questions

Q: How long does a bridge usually take? A: Many cases complete in about 43 days from offer, faster than traditional routes. Complex titles or heavy works can extend timelines, so early legal instruction helps.

Q: What will it cost in real terms? A: Typical monthly rates range around 0.64% to 0.85%, plus arrangement, valuation, legal, and sometimes exit fees. Calculate total interest over your expected term, not just the headline rate.

Q: What LTV can I expect? A: Around 50% to 70% is common, influenced by asset type, location, and borrower profile. Lower LTV usually brings sharper pricing and smoother underwriting.

Q: What are typical exits? A: Property sale is the primary exit, with buy-to-let remortgage frequently used where rental income supports a term loan. Commercial refinance is viable for income-producing assets.

Q: Do I need prior experience for refurbishment? A: Experience helps, especially on heavier works, but strong professional support, realistic costs, and a clear programme can offset limited track record with some lenders.

Q: Can I repay early without penalties? A: Many products allow early repayment with interest charged only for the time used. Always check the facility letter for any minimum term or exit fee.

How Kandoo helps you move first

Kandoo compares specialist lenders across the UK market, shaping a facility around your purchase or project timeline. We assess costs, structure the exit, and coordinate valuation and legal work to compress completion times. With a clear focus on total cost and deliverability, we work to secure funding that lets you act with confidence and speed.

Important information

This guide is for information only and is not advice. Bridging finance is secured on property and your property may be repossessed if you do not keep up repayments. Terms depend on your circumstances and may change.