Bridging finance for renovation projects

Renovation momentum with short-term funding

Bridging finance has moved from niche to mainstream for UK renovations, thanks to faster completion times and competitive monthly rates. In Q3 2025, gross lending rose to £209.4 million, up 4.9% on Q2. Efficiency improved, with average timelines shortening, while Q2 volumes held steady at £199.7 million despite wider uncertainty. That resilience points to growing borrower confidence and a market that values speed.

Costs have also become more predictable. Average monthly rates fell to 0.81% in Q2 2025, the lowest in over a year, while average loan-to-value ratios hovered in the mid-50s, reflecting disciplined underwriting. Many lenders are comfortable up to 75% LTV on the right asset and plan. At the same time, application volumes grew and brokers widely expect further expansion through late 2025, helped by a sector whose loan books are forecast to exceed £12 billion by year end.

Why are renovators turning to bridging? It unlocks funds when traditional mortgages will not. Uninhabitable properties, auction deadlines, complex titles or works that alter the property can slow or stall mainstream approvals. Bridging responds to the project rather than the paperwork, with average completion times around six weeks in recent datasets. That speed is crucial for office-to-residential conversions, EPC-driven upgrades and time-sensitive purchases below market value.

Exit routes are clear. The majority of renovation bridging loans are repaid via sale after works complete, with a significant minority exiting through remortgage to buy-to-let or residential products. In practice, that means you can buy, refurbish and either sell at a higher value or refinance onto a cheaper, longer-term mortgage as soon as the property is mortgageable and income or valuation stacks up.

Understanding APR is not just about percentages - it is about the real pounds and pence you will pay each month. We break down the numbers so you can plan with confidence.

Bold market indicators, lower monthly rates and improved completion times are setting a supportive backdrop for UK homeowners, landlords and developers who need quick, flexible capital to transform properties.

Who benefits most

If you are buying a fixer-upper, tackling a heavy refurbishment or converting commercial units into homes, bridging can keep your project moving. Homeowners use it to complete within 28 days at auction, to fund renovations before remortgaging, or to buy before selling without breaking a chain. Landlords and investors deploy it to acquire uninhabitable stock, uplift EPC ratings, or execute flips where value is created through works. Small developers combine it with development finance for phased schemes or to bridge a timing gap before a confirmed refinance. If timing, complexity or property condition is holding you back, bridging is designed for precisely those scenarios.

Your funding routes

1. Purchase bridge - buy quickly, renovate, then sell or remortgage.

2. Refurbishment bridge - funds light or heavy works with staged draws.

3. Auction finance - 28-day completions with pre-approval to bid confidently.

4. Regulated bridge - for your home or a family property where FCA rules apply.

5. Unregulated bridge - for investment or business purposes, often higher LTVs.

6. Conversion bridge - office-to-residential or mixed-use changes needing speed.

Pounds and practicalities at a glance

Figures are indicative and vary by lender, LTV, property and borrower profile. Always model interest, fees, contingency and tax to stress test downside outcomes.

Can you qualify

Eligibility hinges on the asset, the plan and the exit. Lenders will ask how you intend to repay the loan, typically through sale or refinance. They will examine your schedule of works, costings and contingency, together with planning permissions where needed. Experience helps, but first-timers can still be approved with strong professional support from builders, architects and project managers. Credit history is assessed sensibly, with greater emphasis on the project and security than a standard mortgage. Valuation will confirm current value and expected value after works. Loan-to-value commonly sits between 55% and 75%, with some products allowing interest to be retained, rolling up until exit. If the property is your or a family member’s residence, your loan will be regulated and additional consumer protections apply.

Kandoo, as a UK-based retail finance broker, can match your renovation aims with lenders that price competitively and move quickly. We help shape a credible exit route, ensure documents are complete, and keep the timeline on track from enquiry to completion.

From enquiry to funds - the road map

1. Outline project, budget and preferred exit method.

2. Get an agreement in principle with realistic LTV.

3. Instruct valuation and provide full documentation promptly.

4. Finalise legal work and confirm works schedule.

5. Receive offer and proceed to completion and drawdown.

6. Start works, using staged releases if required.

7. Monitor costs and milestones against contingency plan.

8. Exit via sale or refinance before term end.

The trade-offs in plain sight

Read this before you commit

Speed is valuable only if the numbers stack up. Build a realistic timeline and assume delays can happen. Price materials and labour using current quotes, then add a contingency. Sense-check the end value against comparable sales, not optimistic listings. If your exit is remortgage, confirm the criteria you will need to meet, including EPC and rental stress tests. If your exit is sale, consider seasonality and buyer demand in your area. Keep communication tight between broker, solicitor, valuer and contractor to avoid bottlenecks. Most importantly, choose a term that comfortably allows for works and marketing, not just best-case assumptions.

Alternatives if bridging is not right today

1. Refurbishment buy-to-let with light works allowed.

2. Development finance for ground-up or heavy structural projects.

3. Further advance or remortgage once property is mortgageable.

4. Joint venture equity to reduce leverage and interest costs.

5. Personal or secured loans for smaller-scale improvements.

Your questions answered

Q: How fast can funds be released? A: Recent datasets show average completions around 38 to 43 days from offer, much faster than traditional routes. Complex cases can take longer, while auction pre-approvals can shorten timelines.

Q: What monthly rate should I expect? A: Competitive cases in 2025 have seen monthly rates around 0.64% to 0.81%, subject to LTV, property, experience and exit. Remember arrangement, legal and valuation fees in your total cost.

Q: How much can I borrow against value? A: Many lenders sit between 55% and 70% LTV, with select products up to 75% for suitable properties and plans. Lower LTV usually means sharper pricing and smoother approvals.

Q: What are common exit strategies? A: Sale after refurbishment is most common, with a strong minority exiting via buy-to-let or residential remortgage once works complete and the property meets lender criteria.

Q: Can first-time developers get bridging? A: Yes, with the right team and a credible plan. Lenders place weight on professional support, realistic costings and a clear exit, especially for heavy works or conversions.

Q: Are regulated bridges different? A: Yes. If the security is your home or a family residence, the loan is regulated with additional consumer protections and checks, which may affect process and documentation.

How Kandoo helps you move faster

Kandoo connects you with a panel of UK bridging lenders that understand renovation timelines. We compare rates, terms and LTVs, shape a robust exit, and coordinate valuation and legals so you can complete quickly and get to work. Speak to us for tailored guidance and a decision in principle that reflects your project, not a template.

Important information

This guide is for general information only and does not constitute advice. Bridging loans are secured on property and may be repossessed if you do not keep up repayments. Terms, rates and eligibility vary by lender and individual circumstances.