Bridging and development finance activity slowed again in the second quarter of 2026, with BDLA members reporting falls in applications, completions and overall loan book values.
Data from the Bridging & Development Lenders Association showed completions of £1.6 billion in the three months to 30 June, down 15.2% on the previous quarter.
Applications fell more sharply, declining by 26.3% to £7.3 billion, while the combined value of participating lenders’ loan books dropped by 10.6% to £10.3 billion at the end of June.
The figures follow a reduction in lending activity during the first quarter and come against a backdrop of weaker property transaction volumes and longer completion times.
The BDLA said market feedback suggested these conditions were putting pressure on new business pipelines and increasing lenders’ focus on the viability of borrowers’ exit strategies.
Development lending proved more resilient, with £273.5 million of loans written during the quarter compared with £276.5 million in Q1.
Second charge completions fell to £101.1 million from £131.3 million in the previous quarter.
Average loan-to-value ratios increased to 57.66%, compared with 56.64% in Q1, while the reported value of loans in default edged down by 0.4% quarter-on-quarter.
Adam Tyler (pictured), chief executive of the BDLA, says: “These figures show that the slowdown in lending activity continued into the second quarter of this year, but bridging and development lenders are not alone in experiencing a quieter market.
“Feedback from across the property sector is that transaction levels are subdued and deals are often protracted.
“A slower-moving housing market is putting downward pressure on new business pipelines, with fewer enquiries and applications coming through.
“At the same time, these conditions bring the exit strategy on short term loans into sharper focus. Where a loan is expected to be exited through a property sale, lenders need to consider not just the anticipated sale price, but how long that sale could realistically take and what alternatives are available if it does not complete within the agreed term.
“What I am hearing from lenders is a greater emphasis on due diligence and on testing those assumptions at the outset. The priority is to support viable transactions with credible exit strategies that reflect the market as it is, rather than relying on expectations of a quicker sale or an improvement in conditions.
“The economic implications extend well beyond specialist lending. Housing development and property transactions support activity across construction, professional services and the wider economy.
“When activity slows, the effects are felt by many more businesses than those directly involved in providing finance. And this is an important part of the message we’re taking into our discussions in Westminster and with organisations including the Bank of England and the British Business Bank.
“The health of the bridging and development finance market is closely connected to wider property activity, housing delivery and business confidence, so understanding what is preventing viable transactions and developments from progressing matters well beyond our own sector.
“That brings the question of housing market stimulus into a wider economic discussion. What’s preventing transactions and developments from progressing, is there intervention that would help and what difference would potential measures make?
“Understanding those barriers is central to assessing the effects on transaction activity, housing supply and affordability. The BDLA will continue to contribute market evidence to those discussions, while supporting the professional standards and responsible lending practices that underpin our sector.”
The BDLA’s quarterly survey is compiled by independent auditors from figures submitted by participating lender members and is intended to provide a snapshot of activity across the UK bridging and development finance market.
