Bridging Trends in the UK: Resilient Market and Improved Efficiency

By Bridging Loan Directory 11th February 2025

The latest Bridging Trends data reveals the UK bridging finance market demonstrated remarkable resilience in 2024, maintaining robust lending volumes while significantly improving operational efficiency.

Key Points for 2024:

Average completion time dropped 23%, demonstrating streamlined operations
Annual contributor gross lending held steady at £822.2 million despite market uncertainties
Interest rates edged up slightly to 0.88% amid macro pressures
Auction purchases rose to 11% while chain breaks fell to 20%
Re-bridging declined to 7% indicating stronger market confidence

In a significant improvement to market efficiency, the average completion time for bridging loans decreased by 23% year-on-year, dropping from 58 days in 2023 to 47 days in 2024.

This marked reduction reflects the increasing maturity of the bridging finance sector, with both lenders and broker introducers demonstrating enhanced operational capabilities and a deeper understanding of the market as bridging becomes more mainstream.

Despite economic uncertainties in 2024 fuelled by the anticipated general election, Budget and other macroeconomic factors, the bridging finance market showed remarkable resilience.

Total gross lending stayed relatively consistent at £822.2 million, just 1% below the historic high of £831m recorded in 2023, making it the second-highest lending volume since 2015.

The average monthly interest rate saw a modest increase to 0.88%, up from 0.86% in 2023.

This reflects a measured adjustment to the broader economic environment while maintaining competitive pricing for borrowers.

While interest rates saw a slight increase, the market maintained a balance between regulated and unregulated lending, indicating favourable market conditions.

Notably, the market witnessed changes in borrowing patterns, with auction purchases increasing from 7% to 11% of total loans, chain-break financing decreasing to 20% from 22%, and re-bridge falling to 7% from 9%.

This increase in auction purchases and decrease in chain breaks suggest a growing awareness and utilisation of bridging finance among landlords and investors who are increasingly turning to bridging finance for investment opportunities.

The decline in re-bridging transactions signals improved market conditions and borrower confidence, with more borrowers successfully exiting their initial bridging loans.

Data provided by Knowledge Bank showed that regulated bridging remained the top criteria search made by UK bridging finance brokers in 2024 and in 2023 reinforcing how bridging is a useful tool for borrowers.

Average loan-to-value levels held steady at 58% in 2024, up marginally from 57% in 2023 indicating responsible lending practices which suggests borrowers are not over-stretching themselves despite rising interest rates.

The average term remained at 12 months for the eighth consecutive year, demonstrating consistent market expectations.

Raphael Benggio, Head of Lending – Bridging Finance at MT Finance comments:

“The 2024 Bridging Trends data paints a picture of a robust, resilient market that continues to adapt and thrive despite external pressures.

With faster completion times and steady lending volumes, these results show how bridging finance has evolved from an alternative solution to an essential component of the UK property finance landscape.”

Phil Jay, Director, at Complete FS comments:

“Complete FS experienced a remarkable 60% increase in both regulated and unregulated cases during 2024.

This growth reflects the market’s increasing demand for rapid completions.

As bridging specialists, we’ve adapted by carefully selecting the right lenders who have not only streamlined their processes but also work with efficient legal partners in order to deliver quick and efficient solutions for our clients.”