Bridging Loans - Frequently Asked Questions

Yes. Land with full planning, outline planning, or even a credible pre-application is one of the most established uses of bridging finance. Loan-to-value is typically 50-65% of land value depending on the strength of the consent and the planned scheme, with rates from around 0.85% per month on clean cases. The bridge funds the acquisition while the borrower works the consent up to the point where a development finance facility can refinance. We arrange both the bridge and the follow-on development loan together so the exit route is locked in from day one.

Bridging is the default funding tool for auction purchases. Both Modern Method of Auction (28-day completion) and Traditional Method (28-day completion from contract) sit comfortably inside the bridging timetable. Loan-to-value of up to 75% of purchase price is normal for clean residential lots, with some lenders going to 80% on prime central London stock. Allow 14-21 days for a standard completion or 7-10 days for a fast-track case with title indemnity and dual representation. Crucially, do the lender shortlist before the auction, not after - the deposit goes down on fall of the hammer, and the wrong lender choice can lose it.

Yes, and unencumbered property is the simplest and fastest security to bridge against. No first-charge consent process to manage, no existing lender to coordinate with, no redemption statement to wait for. Loan-to-value of up to 75% (and occasionally 80%) on residential, up to 70% on commercial and up to 65% on land is typical. The funds released can be used for almost any legal purpose: another acquisition, business cashflow, tax liabilities, refurbishment, divorce settlement, school fees, or releasing capital before refinance onto a buy-to-let or commercial term loan. Where the property is owner-occupied the loan is regulated; where it is investment or business property it is unregulated.

Yes, but the unexpired lease term affects both lender appetite and loan-to-value. Most lenders are comfortable with 70+ years unexpired at the end of the bridge term. Between 50 and 70 years narrows the lender shortlist and trims LTV by 5-10%. Below 50 years moves the case to a small group of specialist lenders, often with an LTV in the 50-60% range and a higher rate. A common use of bridging is to fund the lease extension premium itself, then refinance onto a normal mortgage once the lease is back to 90+ years.

Yes, with caveats. Headline rates from the larger bridging lenders move very little case-by-case because they are set at panel level. But the all-in cost of a bridge is the rate plus the arrangement fee, exit fee (where present), valuation, legal costs and any monitoring fee. There is real negotiating room across that full package, especially on larger loans (£1m+), repeat-borrower relationships, and cases with strong exit cover. Whole-of-market broking - putting two or three lenders into competition - is what actually moves pricing rather than negotiating with a single lender in isolation.

A closed bridge has a defined, contracted exit on or before a specific date - typically a sale with a signed contract or a remortgage with a formal mortgage offer in hand. An open bridge has no contracted exit but does have a clear strategy: marketing the property, refinancing once the works are complete, or selling on consent. Open bridges are slightly more common in the current market and price 0.05-0.15% per month above the closed equivalent to reflect the exit uncertainty. Most lenders will run either, but a closed bridge is always easier to underwrite and quicker to complete.

A second charge bridge sits behind an existing first-charge mortgage. The first mortgage stays in place and continues to be serviced normally. The second charge bridge takes a junior security position and releases the equity above the first loan, up to a typical combined loan-to-value of 70-75%. First-lender consent is usually required and is the most common cause of delay (5-10 working days from a high-street bank). The second charge is repaid by sale, by refinance of both charges together, or by the project the funds were used for. See our second charge bridging page for the full detail.

A day-one refinance is where a borrower takes a bridging loan against a property they completed on very recently (often in cash, sometimes within the last 24 hours) to release capital straight away rather than wait for the standard 6-month re-mortgage window most term lenders impose. Specialist bridging lenders run day-one cases routinely. The underwriting runs on the purchase price or the open market valuation, whichever is lower, and the exit is typically a refinance onto a buy-to-let or commercial term loan once the lender's 6-month seasoning rules are met.

First step is to talk to the lender in good time, ideally 30-45 days before maturity, not after. Most lenders will agree a short extension (1-3 months) on commercial terms if the exit is in flight - sale agreed but not completed, refinance offer issued but not drawn. The extension is normally at the same rate or marginally higher, with a small extension fee. If the exit has fallen over entirely, options include re-bridging onto a new bridge facility (we arrange these regularly), restructuring onto a longer-term commercial loan, or in the worst case the lender's recovery process. Communicating early is what keeps the case commercial rather than contentious.

Standard cases complete in 14-21 working days. Fast-track cases with title indemnity, AVM valuation and dual representation can complete in 5-7 working days, with the fastest at 48 hours. Larger or more complex cases (offshore structures, multi-asset security, mixed-use commercial) typically run 21-35 days. The main drivers of timing are the RICS valuation (5-10 days from instruction in normal markets), the legal phase (highly variable depending on title and search complexity), and any first-charge lender consent required on a second-charge case.

Yes, every bridging loan needs solicitor representation. On a standard bridge the borrower and lender are each represented by their own firm. On fast-track cases a dual-representation arrangement is used, where one firm acts for both parties to compress the legal timeline. The borrower's legal fees on a typical bridging loan run from £1,500 to £4,000 plus VAT and disbursements, depending on complexity and loan size. We can recommend specialist bridging conveyancers who routinely complete inside the bridging timetable rather than the high-street average of 12-16 weeks.