Bridging finance for developers

Why bridging is powering UK development in 2025

Bridging finance gives developers speed and certainty when the clock is ticking. In early 2025, completions held at record levels of around £2.8bn for the quarter, with applications up sharply. Average loan sizes near £540,000 and meaningful development funding underline that both mid-sized and larger projects are active across Great Britain. That momentum is encouraging, because strong demand usually means more product choice and quicker decisions.

Pricing has also edged lower. Average monthly interest rates eased from roughly 0.86% to about 0.81% into Q2 2025, the lowest in over a year, while typical loan-to-value ratios sit in the low 50s. The result is improved affordability without lenders abandoning discipline. Completion times are tightening too, with many offers converting to completion in weeks rather than months. For developers, this translates to competitive bids at auction, faster conditional exchanges and smoother conversions.

Crucially, use cases have broadened beyond auction purchases. Office-to-residential conversions, HMOs, heavy refurbishments and green upgrades are all seeing increased bridging demand. Product innovation reflects this shift, with green bridging and selective no-valuation routes appearing as competition rises. Forecasts suggest the total UK bridging book could surpass £12bn in 2025 if current volumes persist, which would further support choice and pricing.

The trade-off is familiar: these are short-term loans priced for speed and exit certainty. Lenders will scrutinise your exit strategy and the credibility of your refurbishment or conversion assumptions. Regional conditions still matter - planning, valuation resilience and local comparables vary between London, Manchester and provincial markets. With the right packaging and a realistic exit, bridging can unlock value that slower finance would miss.

Understanding APR is not just percentages - it is knowing what you will pay in real terms.

Bold move, measured risk: that is the essence of well-structured bridging.

Who benefits most right now

Bridging is best suited to UK developers and investors who need to transact quickly or unlock value through refurbishment, conversion or change-of-use. If your project relies on a tight completion window, a conditional exchange, or a short lease issue that hinders mainstream lending, a bridge can provide the necessary runway to refinance or sell. Homeowners using regulated bridging for chain breaks or major works are also growing in number, though most development lending remains unregulated.

Bridging solutions you can consider

1. Light refurb bridging - decorative works, minor layout changes.

2. Heavy refurb bridging - structural changes, extensions, significant M&E.

3. Conversion bridging - office-to-resi, retail-to-resi, HMOs.

4. Development exit bridging - refinance to release sales time or reduce costs.

5. Auction bridging - rapid completion within 28 days.

6. Green bridging - energy upgrades to lift EPC and value.

7. No-valuation or desktop valuation - selective, property dependent.

Costs, impacts and risks at a glance

Can you qualify - and on what terms

Eligibility hinges on the property, the project and the exit. Lenders want credible borrowers, realistic schedules and valuations that reflect the local market. Clean credit helps but is not always essential if security and exit are strong. Expect tighter underwriting on marginal schemes as competition for quality deals increases. Typical leverage remains in the low 50s LTV, with higher gearing possible where proven experience, additional security or strong pre-lets exist. Regulated cases - where the borrower or family will occupy the property - follow different rules and timelines, so clarity on use is essential at the outset.

For conversions and heavy refurbishments, lenders will assess planning position, build warranties, contractor capability and contingency. Green upgrades can improve pricing or speed with select providers, but exit feasibility must be stress-tested. Regionally, values in central London can support larger tickets while some provincial markets require more conservative assumptions. Kandoo works with a panel of UK lenders, matching your project profile to a product set that balances price, speed and structure, including second-charge or cross-charged security where appropriate.

From enquiry to funds - the quick route

1. Outline the property, works, timescales and exit plan.

2. Share evidence: valuations, planning, costings, contractor details.

3. Receive indicative terms based on security and leverage.

4. Instruct valuation and legal due diligence promptly.

5. Satisfy underwriting conditions and provide final documents.

6. Sign facility agreement and complete drawdown or completion.

The trade-offs in plain view

What to weigh up before committing

Speed is valuable only if the exit is secure. Build in time for works, marketing and refinance, and stress-test values, rents and long-term rates. Completion times have improved but still rely on clean paperwork, responsive solicitors and an achievable valuation. Budget for fees at both entry and exit, including any extension costs if timelines stretch. If your scheme depends on planning or change-of-use, set realistic milestones and allow for local authority variability. Keep an eye on tax and regulatory updates that could influence rental demand or holding costs. Strong packaging - clear cost plan, contractor credibility and contingency - makes approval faster and pricing sharper.

If bridging is not the best fit

1. Development finance - staged drawdowns for ground-up builds.

2. Buy-to-let or portfolio refinance - long-term hold strategies.

3. Secured business loan - shorter terms, smaller tickets.

4. Mezzanine finance - top-up leverage behind senior debt.

5. Joint venture equity - share risk to reduce gearing.

Frequently asked questions

Q: How much can I borrow on a bridge? A: Many lenders work to LTVs in the 50-70% range depending on property type, experience and exit strength. Average market LTVs currently sit in the low 50s.

Q: What do bridging loans cost in 2025? A: Average monthly rates recently eased to around 0.81%, with fees for arrangement, valuation, legal work and sometimes an exit fee. Price varies by leverage and project complexity.

Q: How long does completion take? A: Some cases complete in days, with many closing within weeks. One widely cited benchmark puts offers to completion at roughly six weeks, subject to valuation and legals.

Q: What projects suit bridging best? A: Auction purchases, office-to-residential conversions, HMOs, heavy refurbs, development exits and green upgrade programmes where speed and value uplift are critical.

Q: What is my exit strategy? A: Either sale or refinance to a long-term facility. Lenders prioritise exit certainty, so plan timelines and affordability under higher-rate scenarios.

Q: Can homeowners use bridging? A: Yes, regulated bridging for chain breaks or major works is growing. It follows different consumer protections and underwriting standards compared with unregulated development lending.

Q: Are green bridging products real options? A: Increasingly, yes. Select lenders offer terms aligned to energy improvements, but exit valuation assumptions must stand up to lender scrutiny.

How Kandoo helps you move first

Kandoo is a UK-based retail finance broker with access to a broad panel of bridging lenders across Great Britain. We match your project to lenders who can deliver on speed, price and structure, then coordinate valuation, legal progress and drawdown to keep timelines tight. Share your project details and exit plan - we will benchmark offers and guide you to a credible, costed solution.

Important information

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