The latest Bridging Trends data showed £199.2 million of bridging loans were transacted by contributors in Q1 2026, compared with £199.9 million in the previous quarter.
Purchasing an investment property remained the most common use of bridging finance, accounting for 22% of transactions, unchanged from Q4 2025.
The share of unregulated bridging loans rose from 56% in Q4 to 59% in Q1, the highest level since Q4 2021, when it stood at 64%.
First charge bridging loans also increased, rising from 89% to 91% of activity. Bridging Trends said this was the joint highest level since its records began in 2015.
The move towards first charge lending coincided with a fall in demand for heavy refurbishment finance, which dropped from 11% in Q4 to 6% in Q1. Business injection cases also fell, from 8% to 4%.
Unregulated refinance activity rose more sharply, increasing from 5% of transactions in Q4 to 11% in Q1.
Knowledge Bank data suggested continued interest in more complex property projects, with broker searches for “grade 2 listed building” rising from 31 in Q4 to 89 in Q1. Searches for “development exit products” increased from 52 to 99 over the same period.
The average loan-to-value fell from 56% in Q4 to 52% in Q1, while the average monthly interest rate edged down from 0.83% to 0.82%.
The average bridging loan term remained 12 months. Average completion times increased slightly, from 52 days to 53 days.
INCREASINGLY SELECTIVE
Sonny Gosai, bridging and commercial director at Brilliant Solutions, says: “Q1 2026 highlights a bridging finance market that remains resilient and increasingly selective. While contributor gross lending held firm at nearly £200m and first charge lending continued to dominate, the data shows borrowers prioritising speed, security and investment-led opportunities.
“Investment purchases remained the leading use of bridging loans, while demand shifted away from heavy refurbishment and business-purpose borrowing, reflecting a more cautious but opportunity-driven market landscape.”
MORE CAUTIOUS LENDING
Chris Oatway, chief executive at LDN Finance, adds: “Investor confidence remains strong, but the standout trend is the reduction in average LTVs, which suggests lenders are becoming more cautious amid ongoing global and economic uncertainty.
“The market is clearly favouring lower-risk transactions, with borrowers and lenders alike prioritising straightforward acquisition and refinance deals over heavier refurbishment projects where construction costs, programme delays and sales tail risk create greater exposure.”
CLEAR SHIFT IN INVESTOR BEHAVIOUR
Shane Chawatama, sales director at Knowledge Bank, said: “These search trends within bridging highlight a clear shift in investor behaviour. While interest in first-time landlord scenarios has fallen significantly, we’re seeing notable growth in areas such as development exits and Grade-II listed properties.
“The rise in development exit searches, in particular, suggests that more investors are actively seeking to maximise value through refurbishment or redevelopment before refinancing or sale. This is mirrored in the increase in searches around listed buildings, where there is clear potential to add value, albeit alongside tighter planning and renovation restrictions.
“Together, these trends point to a market that is becoming more strategic, but also one that must navigate the ongoing challenges of upgrading existing housing stock, particularly in the context of evolving EPC requirements and regulatory pressures.”
Bridging Trends combines bridging loan completions from specialist finance packagers operating in the UK bridging market, with criteria search data supplied by Knowledge Bank.
