Bridging finance activity remained steady in the first quarter of 2025, with the sector marking a historic high in operational efficiency despite increased lending volumes.
The latest figures from Bridging Trends show total gross lending by contributors reached £202 million, holding firm against the previous quarter, while average completion times fell to an all-time low.
MATURITY
Applications rose slightly in Q1, yet the average time taken to complete a loan dropped sharply to just 32 days – seven days faster than in Q4 2024 and the quickest turnaround since Bridging Trends began recording data in 2015. This improvement in processing speed reflects growing maturity across the sector, with brokers and lenders responding more effectively to borrower demand and regulatory requirements.
The sharpest shift in loan purpose came in investment purchases, which climbed from 13% in Q4 2024 to 23% in Q1 2025, becoming the most common use for bridging finance. The increase is widely attributed to the rush to secure stamp duty savings ahead of the 31 March deadline. Heavy refurbishment also grew in popularity, up from 9% to 11%, as borrowers turned their attention to value-adding projects. Meanwhile, re-bridging rose modestly from 8% to 10%, suggesting continued confidence in the short-term market outlook.
REGULATED LOANS
Data from Knowledge Bank indicates regulated bridging loans remain in strong demand, representing 44% of activity. This figure was unchanged from the previous quarter, as was the 53% share held by unregulated loans. Loan-to-value ratios saw a marginal dip, with the average LTV standing at 55.4%, down from 55.7%, while average terms continued to hold at 12 months for a fourteenth consecutive quarter.
Raphael Benggio, director of bridging at MT Finance, noted the significance of the Q1 data. “The uptick in investment purchases, from 13% to 23%, suggests a strong link to stamp duty considerations, demonstrating borrowers’ keen awareness of these opportunities. The resultant decrease in completion time, where a surge in activity could have potentially strained processing times, represents the sector’s enhanced efficiency.”
At Brightstar Financial, bridging and development finance specialist Benjamin Peace praised the sector’s responsiveness. “Despite an increase in applications, average completion times dropped by a full week – from 39 to 32 days – the fastest since Bridging Trends began tracking the data in 2015. This progress reflects sharper underwriting, greater lender agility, and a broader shift toward a more efficient, borrower-focused market.”
Knowledge Bank’s sales director, Shane Chawatama, pointed to notable shifts in search criteria as further signs of change in the market. “The significant rise in interest for ‘lend against land property’ climbing to 7th in Q1 2025 from 22nd in Q4 2024, alongside development bridging entering the top 10, suggests increasing appetite for early-stage and land-based development. Similarly, interest in ‘new build flats/apartments’ surged upwards, jumping to 38th from 99th.”
Chawatama added that these shifts could reflect brokers accelerating deals to meet the stamp duty deadline, underlining the adaptability of bridging finance in time-sensitive scenarios.
With strong volumes, resilient lending patterns and a sharper focus on delivery, the sector enters the second quarter of the year in robust health. The data supports growing optimism that bridging finance will continue to serve as a versatile, efficient tool for investors and developers alike throughout 2025.
