Looking to buy your next home before selling your current one?
If you are a UK homeowner, chances are you have been in the same boat as thousands of other homebuyers across the country. We are fast-moving times in the UK property market, with bridging loans now playing a key role for many people wanting to make the move.
Bridging finance allows UK homebuyers to bridge the time between buying their next property and selling their current home. If you want to do both transactions at the same time, traditional mortgage lenders won’t be able to help you. Bridging loans are a fantastic option that lets you do that instead.
In this guide, we are going to walk you through everything you need to know about bridging loans for UK homebuyers. We will cover:
- What Are Residential Bridging Loans?
- Why Homebuyers Are Turning to Bridging Finance
- The Legal Side of Bridging Finance
- How to Qualify for a Bridging Loan
- The Application Process Explained
- Key Things to Consider Before Applying
What Are Residential Bridging Loans?
Residential bridging loans are short-term loans used to buy property.
These loans are designed to be quick to arrange and complete compared to traditional mortgages. They allow the buyer to ‘bridge’ the gap between buying their next home and selling their current one. As such, this type of loan is often known as bridging finance.
The way a bridging loan works is simple:
- Buy your next home with a bridging loan instead of a mortgage
- Keep your current property and rent it out if necessary
- Sell your old home
- Use the money from the sale to repay the bridging loan
- Keep the new property
If you have ever wanted to move to a new home before selling your old one, bridging loans are the way to do it.
The bridging market has grown by leaps and bounds in recent years. According to the Bridging & Development Lenders Association, bridging loan completions have already hit £2.8 billion in the first three months of 2025 alone.
Why Homebuyers Choose Bridging Finance
There are few things in life as fast-paced as the UK property market.
We all know the feeling. One minute you have fallen in love with a property, and the next, it is yours. But there is a problem. Standard mortgage approval can take weeks or even months. All that time your dream home could have been sold to someone else.
Bridging loans get around this problem through speed.
The fast turnaround times make bridging finance very appealing to homebuyers. The average bridging loan will complete in weeks. In comparison, a typical mortgage could take months.
Speed is important, but that’s not the only advantage to bridging loans. Other reasons homebuyers are turning to bridging finance include:
- Preventing a chain break when selling your old home
- Buying at auction – properties at auction must complete in 28 days
- Unlocking properties that are not mortgageable
- Acting quickly on undervalued properties for investment
Chain-break bridging loans now make up 23% of all bridging loans and are up sharply from 19% a year previously.
Understanding the Legal Side
UK real estate law is a big part of bridging finance.
One important distinction between bridging and standard mortgages is the concept of regulated vs. unregulated loans. Bridging loans are regulated if the borrower or their family is to live in the property. These loans fall under the jurisdiction of the Financial Conduct Authority (FCA).
Why does that matter?
Regulated bridging loans have to meet certain lending standards and documentation requirements. The extra consumer protections are intended to make sure the loan process is transparent and above board. Unregulated bridging loans tend to be for investment properties and business purposes.
Some key takeaways on legal requirements for bridging loans include:
- Property valuation by an independent surveyor
- Separate legal representation for borrower and lender
- Property title searches
- Verification of an exit strategy
The due diligence may add time to the process, but it protects both the borrower and the lender.
Homebuyers with experience working with solicitors on bridging transactions are able to complete much faster than first-timers.
How to Qualify for a Bridging Loan
Qualifying for a bridging loan is a little different than for a standard mortgage.
The focus for a bridging lender is mainly going to be on two things – property value and the exit strategy. Borrower credit history is less important. This is good news for borrowers that may have credit scores they are not proud of.
Key things bridging lenders will want to see include:
- Equity of at least 25-40% in the property
- A clear exit strategy for repaying the loan
- A property that the lender will accept as security
- Proof of identity
Lenders will first want to see that there is enough equity in the property. The easiest exit strategy is for the borrower to have a property they can sell to repay the loan. This is normally the current home. Refinancing onto a traditional mortgage after property improvement works are also common.
It’s easy!
The focus on exit strategy rather than income means bridging loans are open to self-employed borrowers and those with more complex financial situations.
The Application Process Explained
The bridging loan application process moves at a much faster rate than for a traditional mortgage.
The key here is a decision in principle (DIP). This lets you know that a lender will most likely agree to your loan before you start house hunting. It gives you more confidence to make offers on properties in the knowledge that you will be able to pay. The full application and supporting documentation will be required once you identify a property.
The bridging loan application process can be summarized in 6 steps:
- Initial enquiry and DIP
- Full application with supporting docs
- Property valuation
- Due diligence by solicitors
- Loan offer
- Completion and funds release
Completions are now much faster across the bridging sector. The latest BDLA statistics show the average bridging loan now completes in just 47 days on average compared to 58 days previously. The fastest transactions with simple case factors can complete much more quickly.
Speed can depend on a few things. Clean property titles, responsive solicitors, and borrowers with all required documentation in order will help. Boring properties with easy valuations and conventional exit strategies will move faster.
Complex cases with unusual properties and multiple securities will take longer.
Key Considerations Before Applying
Bridging loans are not for everyone.
The fees and costs will be higher than for a traditional mortgage. Interest is calculated monthly rather than annually, and there are often other fees like arrangement fees, valuation fees, and legal fees. Always work this out first before proceeding.
Other key things to consider before applying for a bridging loan include:
- Calculating the total cost of borrowing
- Are you realistically able to complete your exit strategy within the loan term?
- Is the property market conducive to achieving your planned sale price?
- What other finance options are available to you? You may be able to get a chain-break mortgage instead.
Bridging loans are great for homebuyers with a clear exit strategy, and a realistic timeline. Those without one should explore other options before applying.
Wrapping It Up
Residential bridging loans are an incredibly powerful tool for homebuyers.
They are fast, flexible, and give borrowers more options. For homebuyers stuck in a chain, renovators, and those buying properties at auction, bridging loans are now an essential part of the UK property market.
The secret to making bridging loans work for you is preparation.
Know the costs involved. Have a clear exit strategy. Work with experienced bridging professionals and move fast when opportunities present themselves.
The bridging loan market has grown by a substantial amount and will continue to grow because it meets the needs of the UK public. Bridging finance enables homebuyers and investors to do things they otherwise could not.
With careful planning and the right advice, bridging loans can help you take the next step in your property journey.
