The Intermediary – September 2026 - Flipbook - Page 73
BRIDGING
Opinion
Versatility in times
of uncertainty
E
ven before Q2’s
Bridging Trends data
was released, I knew it
was going to make for
interesting reading.
The warning signs
were there in the first quarter, with
contributor gross lending down
slightly, from £199.9m in Q4 2025 to
£199.2m, as the sector started to feel
the impact of the conflict in Iran. The
full implications of the upheaval were
clear by Q2, with contributor gross
lending unsurprisingly falling again
to £173.1m, a 15% drop on Q1.
It is likely that a proportion of
potential borrowers simply decided to
postpone their transactions initially,
thinking the upheaval would be
short-lived.
Amid high street lenders pulling
products and increasing rates,
bridging proved vital for those
part way through transactions,
particularly those racing against time
to complete.
Accordingly, preventing a chainbreak and purchasing an investment
property were the most popular uses of
bridging loans in Q2, both accounting
for 18% of all transactions, compared
to 14% and 22% respectively in Q1.
The rise in bridging loans used to
prevent a chain-break likely lead to the
increase in regulated bridging loans,
which rose from 41% in Q1 to 48% in
Q2 – the biggest quarterly increase
since Q1 2022.
This need to move at speed was also
reflected in the average completion
time falling from 53 days in Q1 to 46 in
Q2. It also points to greater efficiencies
across all parties, which is always
encouraging to see.
What really stood out for me was
the increase in second charge bridging
loans, which soared from 9% in Q1
to 22% in Q2. There seems to have
been an acceptance among borrowers
during the second quarter that
political tensions were not going to be
resolved any time soon.
If there is one thing
RAPHAEL BENGGIO
is director of bridging
at MT Finance
we can take from the Q2
data it is that bridging’s
versatility makes it a
powerful resource for
homeowners, landlords
and investors, particularly
in times of uncertainty”
As a result, they pivoted to capitalise
on opportunities. Taking out a second
charge bridging loan was a savvy way
of doing this, providing funds without
impacting an existing mortgage. This
would be particularly beneficial for
those with a favourable rate on their
first charge.
Alongside the rise in second
charges, there was also an increase in
demand for finance oen associated
with equity release, which is what I
would have expected to see.
The percentage of heavy refurb
bridging loans rose from 6% in Q1 to
10% in Q2, while funding a business
injection more than doubled, coming
in at 9% in Q2 compared to 4% in Q1.
Others looked to utilise bridging
finance to purchase an auction
property, with demand rising from
11% in Q1 to 14% in Q2.
An auction can be a cost-effective
way of securing an asset quickly,
making it an aractive prospect for
landlords and investors.
With many needing to complete
within 28 days, a buyer does need a
lender that can move quickly, which
is why a bridge makes so much
sense. This increase will have also
contributed to the reduced average
completion time. Another figure I
found interesting was the interest rate,
which fell, albeit very marginally,
from 0.82% in Q1 to 0.81% in Q2,
despite the rise in second charges
which are inherently riskier for
lenders. Thankfully, it seems that
borrowers are being careful not to
overburden themselves, which was
also evident in the fact that the average
loan-to-value (LTV) rose only slightly,
from 52% in Q1 to 55% in Q2.
Finally, Knowledge Bank reported
which search terms made by UK
bridging finance brokers saw the
biggest changes; these were ‘cross
collateral charges’, ‘lease extension
before completion’ and ‘holiday lets’
– indicating the areas their clients are
particularly interested in.
A powerful resource
If there is one thing we can take
from the Q2 data it is that bridging’s
versatility makes it a powerful
resource for homeowners, landlords
and investors, particularly in times of
uncertainty. A huge amount of work
has been done by lenders and brokers
to educate borrowers about the many
uses of bridging, and that is paying off.
Yes, bridging will always be associated
primarily with preventing chainbreaks, but borrowers are increasingly
becoming aware of its other functions.
This will be particularly important
as we move into the fourth quarter
of the year. At this point, it seems
inevitable that a degree of uncertainty
will remain for the rest of 2026,
particularly with another Budget in
the offing. It is our role as specialist
lenders to ensure we are taking a
solution-first approach to applications
and that brokers and borrowers are
receiving the support they need. That
is definitely what we will be doing at
MT Finance. ●
September 2026 | The Intermediary
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