New Bridging Trends data highlights the growing role of bridging finance for homeowners, investors and business owners, with regulated lending reaching its highest level in more than four years.
Gross contributor lending totalled £173.1 million in Q2 2026, a 15% decrease from the £199.2 million recorded in Q1. The reduction followed a period of increased global uncertainty, which led some borrowers to postpone transactions at the end of the first quarter and beginning of the second.
Despite the softer overall lending volume, the data highlights the continued versatility of bridging finance, particularly as mainstream lenders have withdrawn products and increased rates.
Preventing a chain break and purchasing an investment property were the most popular uses of bridging finance during Q2, each accounting for 18% of all transactions. This compares with 14% and 22% respectively in Q1.
The proportion of regulated bridging loans increased from 41% in Q1 to 48% in Q2, representing the largest quarterly increase since Q1 2022. The rise reflects growing use of bridging finance by homeowners facing time-sensitive property transactions and other circumstances requiring short-term funding.
Bridging finance was also used by borrowers seeking to take advantage of investment opportunities. Demand for auction finance increased from 11% of transactions in Q1 to 14% in Q2.
There was also increased demand from homeowners, investors and business owners looking to unlock equity without disturbing existing mortgages. Heavy refurbishment bridging increased from 6% to 10% of transactions, while funding a business injection more than doubled from 4% in Q1 to 9% in Q2.
This focus on equity release contributed to a significant increase in second charge bridging, with its share of transactions rising from 9% in Q1 to 22% in Q2. This was the highest level recorded since Q1 2021, when second charge bridging accounted for 22.2% of transactions.
Despite the increase in second charge lending, the average monthly interest rate remained broadly stable, edging down from 0.82% in Q1 to 0.81% in Q2. Average LTV increased from 52% to 55%, remaining below 60% and indicating that average borrowing levels continued to sit at relatively prudent levels.
Completion times also improved during the quarter as borrowers prioritised speed. The average completion time fell from 53 days in Q1 to 46 days in Q2, suggesting increased efficiency across the specialist lending process.
Bridging Trends combines bridging loan completions from several specialist finance packagers operating within the UK bridging market, including Adapt, Brightstar Financial, Brilliant Solutions, Capital B, Clever Lending, Clifton Private Finance, Complete FS, Enness, Impact Specialist Finance, LDNfinance, Optimum Elite and Sirius Finance.
The latest figures reinforce the increasingly diverse role of bridging finance within the property market. While traditionally associated with urgent or time-sensitive transactions, the data shows borrowers are also using short-term finance strategically to unlock equity, secure investment opportunities, fund refurbishments and support wider financial requirements.
For high-net-worth borrowers and property investors, the flexibility of bridging finance can be particularly valuable where conventional lending does not align with the timing, structure or objectives of a transaction.
Read the full article in Financial Reporter.
