Bridging finance for portfolio expansion

The pace you need to grow your portfolio

Bridging finance is designed for moments when time matters more than anything else. Auctions, off-market opportunities, a buyer falling through on your onward purchase - these are the points where a conventional mortgage can be too slow. The UK market reflects this urgency. Completions hit a record £2.30bn in Q4 2024 and total loan books passed £10bn, with forecasts suggesting £12.2bn by the end of 2025. That momentum is continuing as competition lifts and rates ease.

What does this mean in practical terms for a portfolio builder? Speed and flexibility. Average monthly rates dipped to around 0.81% in Q2 2025, with lenders competing and tailoring products for refurbishments, HMO conversions and mixed-use projects. Average completion times have tightened - often around 43 days across the market, with some quarters recording even faster turnarounds near 32 to 38 days. Average loan-to-value typically sits near the mid-50s, signalling a prudent approach that still unlocks capital quickly.

Investors are already leveraging these conditions. Investment purchases rose to become the top use of bridging in early 2025, and a growing share of loans are regulated for homeowners too, bridging buy-before-sale scenarios or chain breaks. Exits are clear and well trodden: most borrowers sell the property to repay, while a substantial minority refinance to long-term buy-to-let products once works complete and rental income is proven.

Understanding APR is not just about percentages - it is about what you will pay in real terms. Think fees, interest accrual, valuation costs and legal work. The right broker helps you weigh these against potential uplift from refurbishment, rental yield improvements or a below-market purchase price. The aim is simple: secure the asset, add value, then refinance or sell on time.

Bridging exists to help you capture value others miss because they cannot move fast enough.

In a market where 72% of brokers expect growth across 2025, the opportunity is twofold: a wider lender pool and more competitive terms that support disciplined, time-sensitive strategies.

Who benefits right now

If you are a UK investor looking to scale a portfolio, bridging can help you act decisively when your strategy relies on speed. Buyers targeting auction lots, motivated sellers, or properties requiring light to medium refurbishment can use a short-term bridge to secure the purchase and complete works before refinancing. Landlords moving into HMOs or upgrading EPC ratings can also benefit when conventional lenders will not release funds until improvements are finished.

Homeowners with a strong equity position may use a regulated bridge to purchase before selling, avoiding the risk of losing a new home because a chain breaks. For developers, stable quarterly lending and mid-range LTVs provide predictability when the wider economy feels uncertain. If you value fast execution, clear exit routes and a focused cost-benefit calculation, bridging is likely to be a useful instrument.

Your funding routes at a glance

1. Standard bridging - short-term finance to buy or refinance quickly.

2. Refurbishment bridge - funds purchase plus light to medium works.

3. Bridge-to-let - bridge initially, then refinance onto a BTL mortgage.

4. Regulated bridge - for homeowners buying before selling.

5. Auction finance - pre-approved terms to meet 28-day completion.

6. HMO conversion bridge - tailored for licensing and upgrade timelines.

7. Commercial or semi-commercial bridge - mixed-use and value-add projects.

Cost, impact, returns and risks

Are you likely to be eligible?

Lenders focus on the asset, the exit and your experience. Clean credit helps, but bridging is often more flexible than mainstream mortgages because it is underwritten against the property and the practicality of your plan. Expect close attention to purchase price, valuation, works schedule, and the evidence supporting your exit - whether that is a refinance to buy-to-let, a sale with agent appraisals, or a remortgage after refurbishment. Loan-to-value near the mid-50s is common, with room to go higher for stronger cases backed by robust security. Income proofs can be lighter than residential mortgages, but you will still need to demonstrate affordability of interest during the term. If the loan is regulated, lenders apply FCA rules and additional consumer protections.

Kandoo works with a panel of UK lenders that specialise in residential, HMO and mixed-use bridging. That breadth supports cases where speed, light works or licensing requirements demand tailored underwriting. If your property is unusual, your timeline is tight, or you are new to bridging and need clarity on exit planning, a broker-led approach helps align lender appetite with your goals.

From enquiry to completion - the steps

1. Outline the property, timescales and intended exit strategy.

2. Receive indicative terms based on value, LTV and project scope.

3. Instruct valuation and start legal due diligence promptly.

4. Finalise underwriting with proofs, plans and cost estimates.

5. Sign offer, agree drawdown structure and settle fees.

6. Complete purchase or refinance and begin works if required.

7. Track milestones and prepare refinance or sale documentation.

8. Exit on time via remortgage or property sale proceeds.

Upsides and trade-offs

Before you commit

A bridge should be the shortest route between opportunity and exit. That means your timeline, costs and contingencies need to be realistic. Allow for delays in planning, licensing or contractor availability and stress test your numbers at a slightly higher rate or lower sale price. If you plan to refinance, check current buy-to-let criteria, expected rental coverage and the impact of EPC requirements. For sale exits, gather agent comparables today and consider price sensitivity if listings increase. Read the loan documentation carefully - understand whether interest is retained, rolled up or serviced, and how any exit fee is calculated. A strong broker relationship helps surface issues early and keep all parties aligned on the target completion date.

Strong exits win deals. Price your margin assuming something goes slightly off plan.

Next step suggestion: line up valuation-ready documentation and solicitor details before you apply to cut precious days from the timeline.

Alternatives to consider

1. Buy-to-let mortgage - cheapest long-term option once works are done.

2. Second charge loan - smaller, faster capital secured against existing equity.

3. Development finance - for heavier refurb or ground-up projects.

4. Joint venture or investor equity - share risk and reduce leverage.

5. Business loan secured on portfolio - flexible but depends on assets and covenants.

Common questions, clear answers

Q: How quickly can a bridge complete? A: Market data shows averages near 43 days, with some periods recording around 32 to 38 days. Good preparation of legal and valuation steps can shorten timelines.

Q: What rates should I expect? A: Competitive monthly rates currently sit around 0.81% on average, with some cases lower where LTV is conservative and assets are straightforward.

Q: How do most borrowers exit? A: Most exits are through property sale, particularly for flips and buy-before-sale strategies. Many investors also remortgage onto buy-to-let after works complete.

Q: Is bridging suitable for HMOs and refurbishments? A: Yes. Lenders are active in refurbishment and HMO conversions, funding works and allowing you to refinance once rental income and valuations are in place.

Q: What LTV can I achieve? A: Around the mid-50s is common, with higher LTVs possible for strong assets and experienced borrowers. Pricing and scrutiny generally rise with LTV.

Q: Are regulated bridges different? A: Regulated bridges follow FCA rules and are used by homeowners, often to buy before selling. Expect additional consumer protections and suitability checks.

How Kandoo helps you move first

Kandoo is a UK-based retail finance broker with access to specialist bridging lenders across residential, HMO and mixed-use sectors. We structure funding to your exit plan, coordinate valuation and legal teams, and help you compare true total cost - not just the headline rate. If you need speed, clarity and accountability from start to finish, speak to us today.

Important information

Bridging finance is a short-term solution secured on property. Your property may be repossessed if you do not keep up repayments. Rates, LTVs and timeframes vary by lender and case. This article is for information only and not personal advice. Always seek tailored recommendations before proceeding.