Does securitisation mean lenders will change their criteria?

Possibly — to meet investor requirements, lenders may align criteria for loans intended for securitisation.

Is securitisation only for large lenders?

It’s most accessible to lenders with sizeable, diversified portfolios, but smaller lenders may participate via partnerships.

How does this affect borrowers?

Indirectly — securitisation can lower rates, increase available capital, and potentially expand product choice.

Are bridging loans risky for securitisation investors?

They carry more prepayment and market risk than long-term mortgages, but returns are higher and durations shorter.

Public securitisation of bridging loans: The next funding frontier for UK lenders

By Alice Ingram 21st August 2025

In the UK, the bridging loan market has traditionally been funded through private investors, institutional credit lines, and warehouse facilities.

But a new trend is emerging, public securitisation, that could significantly change how lenders fund and scale their operations.

By packaging pools of bridging loans into tradeable securities (often in the form of Residential Mortgage-Backed Securities – RMBS), lenders can access deeper capital markets, diversify funding, and increase lending capacity.

In late 2024, UK bridging loan securitisations topped £10 billion in total issuance, with more lenders signalling plans to enter the public markets in 2025.

What Is Public Securitisation?

Public securitisation is when a lender bundles together a portfolio of loans and sells them to investors as tradable securities. Investors receive returns based on the loan repayments (interest and capital) made by the underlying borrowers.

For bridging finance, securitisation offers a route to:

Free up capital for new lending
Reduce funding costs through capital market pricing
Tap into institutional investor appetite for short-term secured debt

Why It Matters for the Bridging Sector

Capacity Growth
Public securitisation can give lenders the ability to scale lending without relying solely on private credit lines.
Competitive Pricing
Access to cheaper funding can filter down into sharper rates for borrowers.
Investor Confidence
Transparency and ratings can help standardise risk perception in what is often viewed as a niche market.

Broker Impact: Why You Should Care

Faster Approvals – Lenders with stable funding lines may be more willing to commit quickly to deals.
Product Innovation – Expect to see securitisation-backed lenders launch more competitive or niche bridging products.
Rate Pressure – If securitisation drives down funding costs, brokers can negotiate better borrower terms.

Potential Risks & Challenges

Challenge	Description
Standardisation of Loans	Pools need consistent underwriting criteria, which could limit flexibility.
Market Volatility	Investor appetite for short-term debt can change rapidly in uncertain markets.
Regulatory Oversight	Public issuance is subject to strict disclosure and compliance rules.