Bridging finance for home renovations

Renovate now, refinance later - why bridging fits 2025

Bridging finance is short-term borrowing designed to move quickly, giving homeowners the funds to buy, fix and improve before taking a longer-term mortgage. In today’s market, the case for bridging is strengthening. Monthly rates have nudged down to around 0.81% on average, while application volumes are up 11% year on year, signalling a competitive field of lenders and better choice for borrowers. In Q3 2025, gross lending rose to £209.4 million, up 4.9% on the previous quarter, with completion times improving again. For consumers, this translates into speed and certainty at moments when property timelines are tight.

The practical attraction is timing. Typical bridging completions now average about 43 days from offer to funds, materially quicker than a standard mortgage. That matters if you are buying at auction, repairing a broken chain, or tackling a property that is not mortgageable at purchase because it lacks a kitchen or bathroom. Average loan-to-value sits near 53%, keeping lender risk modest and pricing keener. Quotes as low as 0.64% monthly have been seen on prime scenarios this year, but pricing depends on security, loan size, term and exit plan.

Scale also builds confidence. The UK bridging sector advances an estimated £5-7 billion each year, serving 40,000-50,000 borrowers across renovations, auctions and chain solutions. Notably, chain breaks account for roughly 23% of bridging cases as buyers shield themselves from the cost and disruption of collapsed chains. Regulated bridging - suitable for homes you or your family live in - represents about 58% of loans, reflecting its growing role in everyday residential upgrades, not just investor projects.

Energy efficiency is another driver. EPC requirements and buyer preference for modern, efficient homes are encouraging green retrofit projects like insulation, window upgrades and heat pump readiness. Bridging helps you fund works that increase value and improve compliance before remortgaging on better terms. The outcome is straightforward: secure the property, complete the refurbishment, then exit via sale or a mainstream or buy-to-let mortgage once the home is mortgageable and revalued.

Bridging is short-term finance designed to move fast - ideal when your renovation cannot wait for a standard mortgage timeline.

Who benefits most from this approach

Bridging suits UK homeowners who need to move quickly and have a clear exit. If you are buying a fixer-upper below market value, facing a chain break, or purchasing at auction with a 28-day deadline, bridging can provide certainty when time is short. It is also well-suited to properties a high-street lender would initially decline, such as those missing essential amenities. Families upgrading their current home under a regulated loan can fund works while remaining compliant with consumer protections. For investors, unregulated options support heavier refurbishments and conversions prior to refinancing. The common thread is a defined plan: complete the renovations, add value, then refinance or sell.

Your funding choices at a glance

1. Regulated bridging - for owner-occupied homes under FCA rules.

2. Unregulated bridging - for investments, flips and complex cases.

3. Light refurbishment - non-structural works like kitchens, bathrooms, rewiring.

4. Heavy refurbishment - structural alterations, extensions and conversions.

5. Auction finance - fast funds to meet 28-day completion deadlines.

6. Chain-break loans - secure your purchase when a chain collapses.

7. Green retrofit funding - EPC-led upgrades and energy efficiency improvements.

8. Development exit bridging - finish works and transition to long-term finance.

What it costs, what it delivers

Who is likely to be eligible

Eligibility starts with viable security and a credible exit. Lenders look for UK properties with a clear title, sound condition relative to the works planned, and realistic valuations from a recognised surveyor. They will want a defined exit route: sale, remortgage to a residential lender, or transition to a buy-to-let product. Typical maximum loan-to-value is 70% on purchase price or market value, sometimes on gross development value for heavier refurbishments, provided the scope of works and costings are robust.

Your profile matters too. Evidence of income, proof of deposit, and a track record of similar projects can help, though first-time renovators are considered where professional contractors and detailed schedules are in place. For regulated loans, affordability and consumer protections apply. For unregulated cases, lenders emphasise project feasibility and contingency. Timescales improve markedly when solicitors are bridging-savvy and planning or building control requirements are pre-checked. Kandoo can introduce you to lenders that match your scenario, from light refurb through to structural conversions, helping you navigate terms and legal steps efficiently.

From application to funds in your account

1. Share your plans, timeline and exit strategy in writing.

2. Obtain an agreement in principle with indicative terms.

3. Arrange valuation and submit supporting documents promptly.

4. Legal due diligence begins, including title and searches.

5. Final offer issued after underwriting and valuation review.

6. Sign documents and transfer any required deposit.

7. Completion scheduled and funds released to your solicitor.

8. Begin works, provide updates, and progress your exit.

Quick wins and watch-outs

Read this before you commit

Timing is everything. A solid schedule of works, itemised costs and evidence of contractor availability reduce the likelihood of delays and extra interest. Check whether you need planning consent or building control sign-off and allow lead times for materials, surveys and access. Be realistic about valuations and exit options, particularly if you are relying on a remortgage at completion. Stress test the numbers for a slower market, slightly higher rates and unexpected snags. Choose legal and valuation partners who regularly handle bridging, as experience can shave days off completion. Finally, understand all fees, including exit or extension costs, and build a cash buffer to keep your project moving if surprises occur.

Alternatives if bridging is not the fit

1. Further advance from your current residential lender.

2. Remortgage with additional borrowing for home improvements.

3. Second charge mortgage secured against existing equity.

4. Personal home improvement loan for smaller projects.

5. Government-backed energy upgrade schemes where available.

6. Family assist or private investor funding arrangements.

FAQs - straight answers to common questions

Q: How is bridging different from a mortgage? A: It is short-term, interest is usually monthly, and the focus is on the asset and exit plan rather than long-term affordability. It funds projects standard mortgages avoid.

Q: What deposit do I need? A: Many lenders will fund up to 70% LTV on purchase price or value. Expect to contribute 30% plus fees and initial works costs, though some will release staged funds.

Q: Can I live in the property during works? A: Yes under a regulated loan, provided the property remains habitable and safe. If not, you may need to move out during heavy refurbishments for building control compliance.

Q: How do I exit the bridge? A: Most borrowers either sell post-refurbishment or remortgage once the property is mortgageable and revalued. Buy-to-let remortgages are common for rental strategies.

Q: What happens if my project overruns? A: Speak to the lender early. Extensions can be agreed for a fee. Budget a contingency and avoid leaving the refinance until the final week of term.

Q: Are green retrofits supported? A: Yes. Many lenders support EPC improvements like insulation, window replacements and heating upgrades, often with flexible drawdowns matched to works.

How Kandoo helps you move faster

Kandoo is a UK-based retail finance broker. We connect you with specialist bridging lenders that align with your timescale, project scope and exit. Our team helps structure the application, anticipate legal requirements and secure competitive terms, so you can start works sooner and refinance with confidence. Speak to us to compare options and get an indicative quote today.

Important information

Bridging loans are secured and your property may be repossessed if you do not keep up repayments. Terms, rates and LTVs depend on your circumstances and security. Always take independent legal and financial advice before committing.