Bridging Loans: The Complete Guide
Bridging loans are one of the most powerful — and most misunderstood — tools in UK property finance. This guide covers how they work, what they cost, every asset class and property type we fund, and when a bridge is the right solution and when it isn't. Rates from 0.49% per month, leverage up to 85% LTV depending on the product, whole-of-market access across our full range of specialist bridging products.
What Is a Bridging Loan?
A bridging loan is short-term finance secured against property, designed to provide capital in days rather than the weeks or months a mortgage takes. The name comes from what it does: it bridges a gap — between buying one property and selling another, between an auction deadline and a full remortgage, between raising development capital and refinancing once a scheme is complete.
Modern bridging is used far beyond the classic "chain break" scenario: auction purchases, refurbishment and conversion projects, development finance, raising capital against an existing property, and refinancing borrowers coming out of default are all now everyday bridging transactions.
The core distinction from a mortgage is what the lender actually assesses. A mortgage lender underwrites the borrower — income, affordability, credit history — over a long term. A bridging lender underwrites the asset and the exit — what the property is worth, how much equity is in it, and how the loan will realistically be repaid. That's what makes bridging finance available in situations a mortgage never could be, and what lets a well-packaged case complete in days.
When Is a Bridging Loan the Right Tool?
Bridging finance earns its cost when speed, flexibility, or asset complexity rule out a mortgage. These are the scenarios we see most often.
Auction Purchases
The standard 28-day auction completion deadline rules out almost any mainstream mortgage. See our auction bridging loans page.
Chain Breaks
Complete a purchase before your existing property sells, without losing the onward transaction.
Refurbishment & Conversion
Fund works on unmortgageable or transitional property. See refurbishment bridging.
Development Finance
Ground-up and heavy conversion schemes, plus development exit refinance once construction risk has passed.
Capital Raising
Release equity from an owned property for business or personal needs — see second charge bridging.
Adverse Credit Situations
Asset-led underwriting means CCJs, defaults and arrears don't automatically disqualify a case. See bad credit bridging.
Refinancing Out of Default
Re-bridge an existing facility that's matured or moved into default before it escalates. See refinance bridging.
Company & SPV Purchases
Newly incorporated companies with no trading history can still borrow. See SPV bridging loans.
Asset Classes & Property Types We Fund
Because bridging is underwritten on the asset rather than the borrower, the range of property types it can be secured against is far wider than a standard mortgage. Below is the full range we cover — including the niche and specialist assets that mainstream lenders won't touch.
Houses, bungalows and standard flats — the most straightforward security type, and the one most likely to qualify for a faster, no-valuation route. See no valuation bridging loans, AVM bridging loans, and desktop valuation bridging loans.
Prime and super-prime property from £1m upward, including HNW individuals, foreign nationals, expats, trusts and offshore structures. See high value residential bridging loans.
Standard BTL, portfolio acquisitions, and below-market-value or auction investment purchases where speed matters more than a conventional mortgage timeline. See investment purchase bridging loans and bridge-to-let, where the BTL exit mortgage is pre-underwritten alongside the bridge itself.
Licensed and unlicensed HMOs, and multi-unit freehold blocks, including funding through conversion and licensing before a mainstream HMO mortgage is available. See HMO bridging loans.
Unmortgageable lots, properties with structural issues or problem title, non-standard and ex-local-authority construction, and development land with or without planning — all fundable to meet the fixed 28-day auction completion deadline. See auction bridging loans.
Retail, office, industrial, mixed-use and specialist operational assets (care homes, hotels, hospitality), plus vacant or transitional commercial property with a defined exit plan. A no-valuation route is available on qualifying commercial cases too. See commercial bridging loans and commercial no valuation bridging.
Residential development land (infill, backland, greenfield, consented), agricultural and paddock land, brownfield and contaminated sites, greenbelt and strategic land, self-build and garden plots, woodland, and car parks. Land is asset- and exit-driven rather than income-based, since it produces no rental income and often has no planning consent yet. See land bridging loans.
Cosmetic and non-structural works through to full-scale heavy refurbishment and commercial-to-residential or dwelling-to-HMO conversions, including on unmortgageable property. Permitted development conversions (office, retail and light-industrial to residential under Use Class E(g)(i), plus HMO and extension schemes) are a specific niche within this. See refurbishment bridging loans, light refurbishment bridging loans, no valuation heavy refurbishment bridging, and permitted development finance.
Schemes that are complete, practically complete, or de-risked from construction risk, refinanced to give breathing room for unit sales or a block disposal rather than a forced rapid sale. See development exit bridging loans.
Timber frame, steel frame, ex-local authority, and other non-standard construction types are considered across most of our range on a case-by-case basis — they simply move a case away from the faster no-valuation routes and toward a full physical inspection. The same applies to defective or complex titles. None of these rule a case out; they change which product and valuation route fits best, which is exactly what we assess at DIP stage.
First Charge vs Second Charge
A first charge bridging loan is the primary security registered against the property — if there's no existing mortgage, or the bridge repays it, the bridging lender holds the senior position and generally offers the most competitive rates.
A second charge sits behind an existing first charge mortgage. It's the right structure when you want to raise capital without disturbing a mortgage you'd rather keep — because it has a favourable rate, or replacing it would trigger early repayment charges. See our full second charge bridging loans guide, including the no-valuation route on second charge no valuation bridging loans.
A second legal charge needs the first charge lender's consent to register. Where that consent is refused for policy reasons, our equitable charge bridging loans route can very often still get the loan completed — at the same competitive pricing as a standard second charge.
Regulated vs Unregulated Bridging
A bridging loan is regulated when it's secured against a property the borrower or a close family member (spouse, civil partner, parent or child) lives in as their main residence. Regulated bridging falls under FCA consumer protection rules — formal affordability assessment, prescribed disclosures, a reflection period, and access to the Financial Ombudsman. See regulated bridging loans.
Unregulated bridging covers everything else — investment property, commercial assets, development, and most limited company transactions — and makes up the majority of the market. It's asset-led rather than affordability-led, which is what allows faster completion and more flexible criteria. See unregulated bridging loans.
Who Can Borrow?
Bridging is open to a far wider range of borrower structures than a mortgage, because the lending decision is built around the asset and exit rather than a standard affordability test.
Individuals
UK residents, non-UK nationals, and expats, including those who wouldn't currently pass a mainstream affordability assessment.
Companies & SPVs
Newly incorporated Ltd companies and SPVs with no trading history, LLPs, partnerships and trusts. Directors typically provide personal guarantees. See SPV bridging loans.
Adverse Credit Profiles
CCJs, defaults, mortgage arrears, IVAs and discharged bankruptcy are regularly considered where the security and exit are strong. See bridging loans for bad credit.
Bridging Loan Rates and Costs in 2026
Bridging is priced monthly, not annually — the figure quoted (e.g. 0.75% pm) is the rate charged for every month of the loan, not a year. Across our whole product range, rates run from 0.49% for the most straightforward, lowest-leverage cases up to 1.35% or higher for complex, higher-risk transactions. Where a case sits within that range depends on the product, the LTV, the asset, and the borrower's credit profile.
| Cost Component | Typical Range | Notes |
|---|---|---|
| Interest rate | 0.49%–1.35%+ pm | Varies by product, LTV, asset type and credit profile. |
| Arrangement fee | 1%–2% | Of the gross loan, typically deducted from the advance on completion. |
| Valuation fee | £0–£2,000 | Waived entirely on qualifying no-valuation products. |
| Legal fees | £800–£2,500 | Borrower's and lender's solicitor costs combined. |
Retained Interest, Explained
Most bridging loans use retained interest — the interest for the agreed term is calculated upfront and deducted from the loan at completion, so there's no monthly payment to make during the term. A worked example: at 0.75% pm, 6 months of interest is 4.5% of the loan value; 12 months is 9%. This is why the term you choose and the exit timeline you actually expect need to line up — retained interest is charged for the full term whether or not you repay early, subject to the specific product's terms.
Loan-to-Value: What You Can Borrow, by Product
Maximum LTV varies significantly by product and asset type — leverage available on a straightforward auction purchase looks very different from leverage on raw land or a second charge. Here's the range across our product set.
| Product | Max LTV | Notes |
|---|---|---|
| Auction bridging | Up to 85% | Any condition, incl. unmortgageable lots. |
| HMO bridging | Up to 85% | Licensed and unlicensed HMOs. |
| Investment purchase | Up to 85% | Auction, BMV and refurb-project purchases. |
| Refurbishment (light & heavy) | Up to 85% | Purchase and works funded together. |
| Development exit | Up to 80% | Against GDV once construction risk has passed. |
| Permitted development | Up to 80% | Net LTV, 100% of works typically funded on top. |
| Bridge-to-let | Up to 75% | BTL exit pre-underwritten with the bridge. |
| Commercial & semi-commercial | Up to 75% | Standard and no-valuation routes both available. |
| Standard residential / no valuation | Up to 75% | See no valuation bridging, AVM and desktop valuation routes. |
| High-value residential | Up to 75% | Net LTV on £1m+ prime property. |
| Closed bridging | Up to 75% | Net LTV, fixed documented exit date. |
| Second charge / equitable charge | Up to 70% | Combined LTV including the first charge. |
| Land | 50%–70% | Varies by land type — highest on consented residential land. |
The Exit Strategy: The Most Important Factor
Every bridging loan has a term — typically 1 to 24 months — and every lender wants a clear answer to one question before they lend: how will this be repaid? The two most common exits are sale of the security property (or another asset) and refinance onto a mortgage or longer-term product.
A credible exit is evidenced and realistic within the loan term — comparable sales evidence for a sale exit, or confirmation you'll be able to pass affordability for a refinance exit. A weak exit — one contingent on an uncertain event like planning permission being granted, or a sale at an optimistic price with no supporting evidence — is the single most common reason a bridging application is declined or priced up. We stress-test the exit on every case before it goes to a lender.
The No Valuation Route
A physical RICS valuation is one of the biggest sources of delay and cost on a standard bridging case. On qualifying assets, that inspection can be replaced with an automated valuation model (AVM) or a desktop valuation — a remote, evidence-based assessment by a RICS valuer without a site visit. Both remove the surveyor lead time and, on the AVM route, the valuation fee entirely.
The route works best on standard residential property at conservative LTV with a clear exit — it's available across much of our range, not just standard residential: see no valuation bridging loans, AVM bridging loans, desktop valuation bridging loans, second charge no valuation bridging loans, commercial no valuation bridging, and no valuation heavy refurbishment bridging.
How a Bridging Loan Is Structured, Step by Step
The same six-stage process runs across every product in our range — what changes case to case is how much time each stage takes.
Initial Assessment
We assess the property, the loan required, the borrower structure and the exit strategy, and confirm the right product and valuation route — often the same day.
Terms Issued
A decision in principle sets out indicative rate, LTV, fees and conditions before any costs are committed.
Valuation, If Required
AVM (same day), desktop (1–2 days) or full RICS inspection (3–10 days depending on asset complexity) — confirmed at DIP stage, not discovered later.
Legal Due Diligence
Title review, searches, and — on second charge cases — consent from the first charge lender and a deed of priority.
Drawdown
Funds released on completion — as fast as five working days on straightforward no-valuation, no-search cases.
Exit
The loan is repaid through sale, refinance, or the agreed capital event — confirmed and documented at completion, not left to manage at the end of the term.
Choosing a Bridging Lender or Broker
The UK bridging market has over 200 active lenders with very different appetites — for asset type, LTV, borrower profile and speed. A specialist broker with direct lender relationships, including access to private capital sources such as family offices and UHNW lending lines, matters most on complex or niche cases where the standard lender panel won't stretch.
- Direct access to lender decision-makers, not a call centre or portal
- Transparent fees and no hidden relationship with a single restricted panel
- Relevant experience with your specific asset type or scenario
- A track record on the niche or complex cases other brokers turn away
Speak to the Aura Capital team directly — no portals, no layers of approval, no unnecessary delay. We assess every case on its individual merits and give you a clear, honest view of what's achievable before you commit to anything.
Our Full Bridging Product Range
Every product referenced in this guide, in one place. If you're not sure which fits your case, get a quote and we'll confirm the right one the same day.
Bridging Loan FAQs
The fastest cases — no-valuation, no-search, straightforward security — can complete in 5 to 7 days. Most standard cases complete in 10 to 14 days. More complex cases, involving full RICS valuations, unusual titles, or a slow-responding existing lender, typically take 3 to 4 weeks.
Yes, often. Bridging is asset-backed rather than income-backed, so lenders focus on the property, the equity, and the exit rather than credit score alone. See our bad credit bridging loans page for detail.
From around £25,000–£50,000 depending on the product, with no fixed ceiling — we've arranged facilities up to £25m and beyond on commercial and development cases.
Not necessarily. Income evidence matters most on regulated cases or where the exit is a refinance that requires affordability at the exit date. On most unregulated, asset-led cases, the security and exit carry far more weight than income documentation.
Speak to your broker and lender as early as possible — extension or re-bridge options are usually available if the exit is still credible. See refinance bridging loans for how a maturing facility can be refinanced before it becomes a problem.
Only where the security is the borrower's or a close family member's main residence — see regulated bridging loans. Aura Capital arranges unregulated bridging finance; where a regulated product is required, we refer you to an FCA-authorised lender or broker.
Yes. Land with no planning consent — greenfield, agricultural, strategic or greenbelt land — is fundable, though leverage is more conservative than on consented residential land, typically 50–60% LTV rather than up to 70%. See land bridging loans for the full range of land types we cover.
Light refurbishment covers cosmetic, non-structural works that don't need planning permission — typically capped around 15% of the property's value. Heavy refurbishment covers structural works, extensions, and conversions, and usually needs a defined scope of works and contractor quotes. See light refurbishment bridging loans and no valuation heavy refurbishment bridging.
Yes — both licensed and unlicensed HMOs, and multi-unit freehold blocks, including funding through conversion works and the licensing process before a mainstream HMO mortgage is available. See HMO bridging loans.
Ready to Discuss Your Requirements?
Speak to the Aura Capital team directly — no portals, no layers of approval, no unnecessary delay. Tell us the asset, the loan required and the timeline, and we'll confirm the right product and an indicative rate the same day.
Related Reading
Risk warning: your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Terms referenced in this guide are indicative and subject to individual lender approval, underwriting, and status — they are not guaranteed. A credit check may be carried out as part of any application; see the ICO for information on how your data may be used.
Aura Capital is not FCA-authorised or regulated and does not provide financial advice. Where a regulated bridging product is required, we refer you to an FCA-authorised lender or broker. See our Treating Customers Fairly policy for our complaints process.
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