The UK bridging loan market has shown remarkable resilience in Q2 2025, with lending volumes holding steady despite wider economic uncertainty.

According to the latest industry figures from the Bridging Trends Report*, total bridging finance lending reached £199.7 million, only marginally down from Q1, reflecting sustained demand from property developers, investors, and homeowners in need of short-term property finance.

Q2 2025 Bridging Loan Market Figures at a Glance:

Total Lending: £199.7 million
Average Loan-to-Value (LTV): 54% (unchanged from Q1)
Top Loan Purpose: Regulated refinance surged to 18% of loans, up from 11% in Q1
Application Volumes: Continued growth, showing strong borrower confidence

The slight drop in average bridging loan rates points to increasing competition among lenders. For developers and investors, this is an ideal time to secure funding for acquisitions, refurbishments, or development bridging loans at historically attractive rates.

Developer & Investor Trends Driving Demand

While regulated refinance has grown in share, unregulated bridging remains the preferred route for property development finance. Key trends in Q2 include:

Office-to-Residential Conversions – Fuelled by high demand for city housing and changes in planning rules.
Refurbishment & Heavy Renovation Projects – Developers using short-term refurbishment loans to unlock higher valuations before sale or refinance.
Land Acquisition Bridging Loans – Securing sites with planning potential before moving to long-term development finance.
Chain-Break Funding – Ensuring transactions proceed quickly even when conventional mortgage timelines lag behind.

These patterns show a clear preference for fast, flexible funding solutions that enable developers to seize opportunities and adapt to market shifts.

However, rising application volumes in 2025 are likely to prompt a combination of responses from mainstream lenders, often balancing increased demand with prudent risk management:

Lending standards may tighten: As demand for bridging and mortgage loans increases, lenders often become more selective to manage risk, especially if applications include a higher proportion of marginal or less creditworthy borrowers. This can involve stricter affordability checks, higher credit score requirements, and more rigorous documentation.
Some areas may see standards ease due to competition: When application volumes increase because of strong underlying borrower demand and healthy market competition, lenders may also respond by lowering margins or relaxing certain requirements in less risky segments to win business—especially if loan default rates remain low. For example, in the euro area, Q2 2025 saw competitive pressures leading to slight easing for certain real estate and residential loan types.
Regulatory oversight remains key: Authorities like the PRA and FCA in the UK have frameworks designed to rein in excessive risk, such as loan-to-income (LTI) flow limits and stress testing requirements. These frameworks can constrain how far standards can loosen even in a high-demand environment.
Sector-specific variations: Standards may tighten more for riskier types of lending (e.g., development finance, higher LTV, or non-prime borrowers) while remaining steady or even easing slightly for low-risk, well-collateralized loans. This differentiation is seen across both regulated and unregulated lending categories

Leverage Lower Bridging Loan Rates

At Onyx Money, we specialise in matching clients with bridging finance solutions that fit their project timelines and goals.

Ways to take advantage of today’s market:

Bridge to Development Finance – Use short-term bridging loans to purchase or renovate, then refinance with a long-term facility.
Move Quickly on Investment Opportunities – Beat competitors to prime properties with fast property finance.
Fund Value-Add Improvements – Use bridging to complete refurbishments and boost both rental yields and resale values.

Learn more about our flexible bridging finance options or explore our guide to bridging loans for property development for detailed examples.

The Bottom Line for Bridging Finance in 2025

The UK bridging loan market in 2025 remains strong, with competitive rates, steady LTVs, and a shift towards both regulated bridging loans for homeowners and development bridging finance for experienced investors. In a property landscape where speed and certainty are paramount, bridging finance is more than just a stopgap—it’s a strategic tool.

If you’re considering bridging loans for property development, refinancing, or investment acquisitions, Onyx Money can help you move quickly and with confidence. Get in touch now.

*Bridging Trends is a quarterly infographic developed by short-term finance lender, MT Finance, as a method for monitoring the latest trends in short-term bridging finance lending in the UK.