Our complete guide to bridging loans and development finance with expert answers from London's specialist brokers. Access to 130+ lenders with rates from 0.45%.

What is a Bridging Loan?

A bridging loan is a short-term, asset-backed lending facility designed to "bridge" the gap between immediate funding needs and long-term financing solutions. These loans are secured against property and typically used when speed of completion is critical.

Key Features:

• Term: 1-24 months

• Rates: From 0.45% per month

• Amount: £25,000 to £50,000,000

• LTV: Up to 75% (80% on larger loans)

• Completion: As fast as 7 days

How Much Do Bridging Loans Cost?

Bridging loan costs depend on several factors:

Interest Rates (Per Month):

• 0.45% - 0.65% - Prime properties, low LTV, strong borrowers

• 0.65% - 1.0% - Standard residential and commercial properties

• 1.0% - 1.5% - Higher risk properties or complex cases

• 1.5%+ - Specialist cases, adverse credit, or urgent completions

Additional Fees:

• Arrangement Fee: 1-2% of loan amount (negotiable on loans over £1M)

• Valuation Fee: £300-£1,500 depending on property value

• Legal Fees: £1,500-£3,000 for lender and borrower solicitors

• Exit Fee: 0-1% (many lenders have removed exit fees)

• Broker Fee: From £299-£499 (waived on larger loans over £1M)

What is Development Finance?

Development finance provides funding for property development projects including new builds, refurbishments, and conversions. Unlike bridging loans, development finance releases funds in stages as construction progresses.

Development Finance Features:

• Amount: £500,000 to £300,000,000

• Rates: From 0.45% per month

• LTC (Loan to Cost): Up to 80%

• LTGDV (Loan to GDV): Up to 75%

• Term: 12-48 months

How Quickly Can I Get a Bridging Loan?

Typical Completion Times:

• 7 days: Straightforward residential cases with clean title

• 10-14 days: Commercial properties or second charge loans

• 2-3 weeks: Complex cases or where extensive due diligence required

• Same day: Decision in principle available for most applications

Factors Affecting Speed:

• Property type and location

• Borrower's financial complexity

• Legal title issues

• Valuation scheduling

• Lender's internal processes

What Can I Use a Bridging Loan For?

Property Purchases:

• Auction property finance (28-day completion)

• Chain break solutions

• Quick property purchases

• Buy-to-let property acquisition

• Commercial property purchases

Development Projects:

• Property refurbishment funding

• Planning permission applications

• Temporary funding while arranging development finance

• Development exit finance

Financial Solutions:

• Inheritance tax payments

• Business cash flow gaps

• Debt consolidation

• Time-critical transactions

What is the Difference Between First and Second Charge Bridging Loans?

First Charge Bridging Loans:

• Primary security against the property

• Lower interest rates (from 0.45% per month)

• Higher LTV available (up to 75-80%)

• Faster completion possible

• Used when no existing mortgage on security property

Second Charge Bridging Loans:

• Secondary security behind existing mortgage

• Slightly higher rates (typically 0.65%+ per month)

• Lower maximum LTV (usually up to 65%)

• Additional legal complexity

• Existing lender consent may be required

How Do I Calculate Bridging Loan Costs?

Monthly Interest Calculation:

Loan Amount × Monthly Interest Rate = Monthly Interest Payment

Example: £500,000 × 0.65% = £3,250 per month

Total Cost Over 12 Months:

• Monthly Interest: £3,250 × 12 = £39,000

• Arrangement Fee (2%): £10,000

• Legal & Valuation: £3,000

• Total Cost: £52,000

Use our free bridging loan calculator for instant quotes across 130+ lenders.

What Credit Score Do I Need for a Bridging Loan?

Good news: Credit scores are less important for bridging loans than traditional mortgages.

We can arrange bridging loans for borrowers with:

• Excellent credit history

• Poor credit scores

• Previous defaults or CCJs

• Mortgage arrears history

• IVAs or bankruptcies

• Recent adverse credit events

Lenders focus more on:

• Property security value

• Clear exit strategy

• Loan-to-value ratio

• Borrower's income (if servicing interest)

What Documents Do I Need for a Bridging Loan?

Personal Documentation:

• Photo ID (passport or driving licence)

• Proof of address (utility bill or bank statement)

• Bank statements (3-6 months)

• Proof of income (if servicing interest)

• Details of assets and liabilities

Property Documentation:

• Property details and estimated value

• Planning permissions (if applicable)

• Survey or valuation report

• Title deeds or Land Registry documents

• Insurance documentation

Project Documentation (Development Finance):

• Building cost estimates

• Planning permissions

• Architectural plans

• Construction timelines

• Sales or refinancing evidence

What Exit Strategies Do Lenders Accept?

Property Sale:

• Open market sale of security property

• Pre-agreed sale contracts

• Auction sale arrangements

Refinancing:

• Residential mortgage refinancing

• Buy-to-let mortgage refinancing

• Commercial mortgage refinancing

• Long-term development finance

Business Exit Strategies:

• Business cash flow improvement

• Asset sales or disposals

• Investment or partnership funding

• Alternative finance arrangements

Can I Get Bridging Finance for Property Auctions?

Yes - auction finance is one of our specialties.

Auction Finance Features:

• Speed: Funds available within 7-14 days

• Amount: £25,000 to £50,000,000

• LTV: Up to 70% of auction price

• Coverage: All major UK auction houses

Auction Finance Process:

1. Pre-approval before auction day

2. Bid with confidence knowing funds are secured

3. Complete within 28 days as required by auction terms

4. Refinance or sell according to your exit strategy

What Types of Property Can Secure Bridging Loans?

Residential Properties:

• Houses and apartments

• Buy-to-let investments

• Holiday homes and second homes

• Residential development sites

• Houses of Multiple Occupation (HMOs)

Commercial Properties:

• Office buildings

• Retail premises

• Industrial units and warehouses

• Hotels and leisure facilities

• Mixed-use developments

Specialist Properties:

• Land (with or without planning)

• Development sites

• Care homes and nursing homes

• Agricultural properties

• Historic or listed buildings

Are Bridging Loans Regulated?

Regulation depends on the property use:

Regulated Bridging Loans:

• Secured against your main residence

• Secured against a property where you or family have lived

• Additional consumer protections apply

• Stricter lending criteria

• Right to cancel within 14 days

Unregulated Bridging Loans:

• Commercial properties

• Investment properties (never lived in)

• Development sites

• Faster processing possible

• More flexible lending criteria

What is Loan-to-Value (LTV) in Bridging Finance?

LTV = (Loan Amount ÷ Property Value) × 100

Typical LTV Limits:

• Residential First Charge: Up to 75% LTV

• Commercial First Charge: Up to 70% LTV

• Second Charge: Up to 65% LTV

• Large Loans (£1M+): Up to 80% LTV possible

Factors Affecting LTV:

• Property type and location

• Borrower's financial strength

• Exit strategy clarity

• Loan size and term

• Lender's appetite

Can I Get Development Finance for New Build Projects?

Yes - we specialize in development finance for all project types.

New Build Development Finance:

• Residential developments: Houses, apartments, mixed-use

• Commercial developments: Offices, retail, industrial

• Ground-up developments: From land purchase to completion

• Permitted Development Rights: Conversions and extensions

Development Finance Structure:

• Initial advance: 100% of land cost (subject to overall LTC)

• Stage payments: Released as construction progresses

• Professional monitoring: Quantity surveyor oversight

• Flexible drawdowns: Matched to construction cashflow

What Are the Risks of Bridging Loans?

Interest Rate Risk:

• Monthly interest charges compound quickly

• Rates higher than traditional mortgages

• Total cost increases with longer terms

Exit Strategy Risk:

• Property market fluctuations

• Sale delays or complications

• Refinancing difficulties

• Planning or legal issues

Mitigating Risks:

• Clear exit strategy with backup options

• Conservative property valuations

• Adequate contingency funds

• Professional advice from experienced brokers

What Areas of the UK Do You Cover?

Nationwide Coverage with London Specialization:

Primary Focus Areas:

• London: All boroughs with local market expertise

• South East: Surrey, Kent, Essex, Hertfordshire, Sussex

• Home Counties: Berkshire, Buckinghamshire, Oxfordshire

National Coverage:

• England, Scotland, Wales, Northern Ireland

• All major cities and regional markets

• Rural and agricultural properties

• Offshore and international borrowers welcome

How Much Can I Borrow?

Bridging Loans:

• Minimum: £25,000

• Maximum: £50,000,000

• Typical range: £100,000 - £5,000,000

• Large loans: £1,000,000+ with enhanced terms

Development Finance:

• Minimum: £500,000

• Maximum: £300,000,000

• Typical range: £1,000,000 - £20,000,000

• No upper limit through private funding lines

What Makes Doulton Bridging Finance Different?

Unique Advantages:

• 130+ lender network - largest broker panel in UK

• £50M bridging loans - higher limits than most brokers

• £300M development finance - major project capability

• London specialists - deep local market knowledge

• 0.45% starting rates - access to most competitive pricing

Service Excellence:

• Quotes in seconds through advanced technology

• Applications in minutes with streamlined processes

• Money in days with fast-track completions

• No upfront fees on larger loans over £1M

• Personal service from experienced London brokers

Get Your Free Quote Today

Ready to explore your bridging loan or development finance options?

✅ Free quotes from 130+ specialist lenders
✅ No obligation consultation with London experts
✅ Same day decisions in principle available
✅ Competitive rates from 0.45% per month

Disclaimer: All rates and terms are indicative and subject to individual assessment. Doulton Bridging Finance is authorised and regulated by the Financial Conduct Authority. Your property may be repossessed if you do not keep up repayments on your loan