Understanding the Bridging Market | Securing financial assistance through bridging loans is often faster and more efficient than traditional lending. However, understanding the balance between interest rates and processing speed can be challenging for many brokers. Liz Syms, CEO of Connect for Intermediaries, provides valuable insights into the critical relationship between these two factors in the bridging market.
Octane Finance’s recent entry into the bridging finance sector is set to shake up the short-term lending landscape. Their approach is expected to introduce fresh perspectives and innovative methods, offering new opportunities for brokers and borrowers alike.
While there have been minor adjustments to lending criteria, true innovation has been rare until now. Octane Finance’s unique product-less proposition, which focuses solely on underwriting risk assessment, marks a significant departure from traditional practices. This innovative strategy sets them apart and has a notable impact on the UK bridging market.
For more on the latest developments in bridging finance and how bridging loans can be used effectively in various scenarios, check out our guide on Understanding the Bridging Market.
What Is Bridging Finance?
A bridging loan is a short-term secured loan used to “bridge” a financial gap, typically between the purchase of a property and securing long-term funding or a sale. These loans are often used for:
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Property purchases with tight deadlines (e.g. auction wins)
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Chain breaks during residential transactions
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Refurbishment projects prior to mortgage eligibility
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Development and commercial acquisitions
Most bridging loans are secured against property, offer terms of 1-24 months, and can be completed in 3–10 working days, depending on the lender.
When Is Bridging Finance Suitable?
Not every case warrants a bridging loan, but here are prime scenarios where it’s ideal:
| Scenario | Why Bridging Works |
|---|---|
| Auction Purchase | Fast completion in under 28 days |
| Chain Break | Keep your purchase intact despite delays |
| Light Refurbishment | Property not mortgageable in current state |
| Downsizing/Relocation | Use equity before the sale completes |
| Development | Fund pre-planning or early-stage works |
Bridging finance is flexible, but it must be structured correctly with a clear exit strategy (sale, refinance, or equity release).
A Bridging Market of Two Speeds: Rate vs. Flexibility
In today’s UK bridging market, lenders typically fall into two distinct categories: those offering low rates with strict underwriting and those prioritising speed with higher costs. For example, Shawbrook and Precise appeal to borrowers with competitive pricing but require detailed underwriting and longer processing times. On the other hand, lenders like MT Finance and West One are favoured for their rapid completions, often finalising deals in under a week, though their interest rates are typically higher.
This divide presents a key challenge in bridging finance: balancing cost versus convenience. Borrowers and advisers must weigh whether low rates justify a slower process or whether paying a premium for speed unlocks time-sensitive opportunities, such as auction purchases or chain-break solutions.
Understanding this dynamic is crucial for brokers working in specialist lending. For support with complex bridging cases and access to both types of lenders, advisers can benefit from joining a Specialist Mortgage Network for Advisers.
In this evolving landscape, the ability to match borrower needs with the right lending strategy, factoring in underwriting complexity, interest rates, and exit plans, is what sets successful advisers apart.
Bridging Loans: Prioritising Low Rates or Speed?
When advising clients on bridging finance, one size does not fit all. The landscape is dynamic, and lenders vary widely in what they offer. Some clients prioritise low interest rates, while others need quick bridging loan completions, especially for auction purchases, chain breaks, or urgent refinancing. As a broker, your role is to identify which lender aligns best with the client’s specific situation.
A growing number of specialist lenders now offer tailored solutions. One standout is Octane Finance, which brings a fresh approach to the UK bridging market. Rather than fixed products, Octane uses a risk-based underwriting model delivering flexible terms without predefined criteria. This “productless” structure enables faster decisions, especially for clients with unusual credit profiles, complex properties, or unconventional exit strategies.
Matching the Right Lender to the Right Scenario
Bridging interest rates depend on a range of factors, including:
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Loan-to-value (LTV) ratio
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Property type and location
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Exit strategy credibility
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Client’s credit history
For time-sensitive deals, brokers should focus on lenders with proven speed and digital case-handling tools. In contrast, rate-conscious clients may be better served by lenders offering lower margins but longer processing times.
Behind the Scenes: Evolving Dynamics in Bridging Finance
In the world of specialist finance, bridging loans have become a go-to solution for clients needing fast, flexible funding, often completing in days rather than weeks. Yet many brokers still struggle to explain how bridging loan interest rates correlate with rapid turnaround times and risk assessments.
As Liz Syms, CEO of Connect for Intermediaries, highlights, every element from loan speed to risk pricing plays a pivotal role in the success of a bridging application. Understanding this dynamic is essential for advisers aiming to structure deals that are both compliant and client-friendly.
A standout entrant to the market, Octane Finance, is shaking up expectations. While many lenders have made incremental changes to their criteria, true innovation has been scarce until now. Octane’s “product-less” bridging model, driven solely by risk-based underwriting, offers a flexible, bespoke alternative to traditional rate sheets. This shift marks a bold step forward in short-term property finance, offering brokers more nuanced solutions tailored to individual circumstances.
Navigating the Bridging Market with Expert Support
The UK bridging finance market is vast, fast-moving, and often complex, especially for brokers unfamiliar with its nuances. With dozens of lenders offering varied criteria and terms, placing the right deal can feel overwhelming. That’s where partnering with a specialist packager becomes invaluable.
Unlike standard residential mortgages, bridging loans require bespoke structuring. There’s no “one-size-fits-all” template. Each lender targets a niche, be it auction purchases, chain breaks, refurb-to-let, or business cash flow. Few, if any, cover every scenario.
Working with a trusted packager connected to a wide panel of bridging lenders ensures advisers can quickly and compliantly match clients with the right funding. It not only saves time but also enhances the client experience by presenting tailored, competitive solutions.
If you’re new to bridging or handling complex property finance cases, joining a Specialist Mortgage Network for Advisers can further streamline access to expert packagers, niche lenders, and structured support.
In today’s market, informed guidance and strong partnerships are key to navigating short-term lending and delivering value that your clients will remember.
Thank you for reading our publication “Understanding the Bridging Market | Low Rates or Quick Deals.” Stay “Connect“-ed for more updates soon!