First-time developer, a part-vacant mixed-use block and a deferred payment to the vendor. Two lenders declined on the deferred payment alone.
11 lenders matched, 4 issued terms
70% LTV at 0.89% a month. Credit-backed offer, into legals in 3 days, completed in 9. Proc fee 1.5%.
Example case for illustration. Real cases are published with the broker’s permission and client details removed.
Learn from a broker
Short, plain-English videos with Kristian Wilkinson, Director at Broka, from first enquiry to completion.
Start here · 1:23
Bridging is supposed to be about speed. When does it make sense, and when is a mortgage the better choice?
In the glossary: Bridging loan
1:23From application to completion A four-part series
0:34
0:50
0:33
0:41More from Kristian
1:12In the glossary: HMO
0:50In the glossary: Indicative terms, Decision in principle, Credit committee
2:14In the glossary: Personal guarantee, A&L
0:45In the glossary: A&L
0:35
1:09
1:29
A short-term loan secured on property, usually for 1 to 24 months. Borrowers use it when speed matters or when a property cannot get a mortgage yet, for example an auction purchase or a refurbishment. It is repaid by selling the property or refinancing onto longer-term finance. That repayment plan is the exit.
Bridging is regulated when it is secured on a home the borrower or a close family member lives in, or will live in. Regulated cases need an FCA-authorised adviser with the right permissions. Loans on investment, buy-to-let or commercial property are usually unregulated.
Loan to value (LTV) is the loan divided by the property value. Most lenders cap residential bridging at 75% LTV. In August, 99 lenders on Broka offered up to 75% and only 5 offered 90%.
The gross loan includes interest and fees that are rolled up or retained. The net loan is what the borrower actually receives. Most lenders measure LTV against the gross figure, so check which one a quote uses.
Retained interest is deducted from the loan up front for an agreed period. Rolled-up interest is added to the balance and paid at the end. Serviced interest is paid monthly by the borrower. Each one changes the net loan and the exit amount.
For a sale, a realistic value and timescale backed by comparables. For a refinance, evidence that the borrower will meet the term lender’s criteria when the bridge ends. Weak exits are one of the most common reasons cases stall.
A first charge means the lender is repaid first if the property is sold. A second charge sits behind an existing mortgage, which needs the first lender’s consent. An equitable charge is used where a legal charge is not possible. In August, 17 lenders on Broka offered equitable charge products.
LTGDV is the loan as a share of the gross development value, the scheme’s value once complete. LTC is the loan as a share of total costs, including land and build. Lenders usually set a limit for both, and the lower one decides the loan.
The land or site element is usually advanced at the start. Build costs are released in stages, or drawdowns, after the lender’s monitoring surveyor confirms the work for each stage is done.
24 months is the most common maximum term among development lenders on Broka. Some go to 36 months or longer for larger schemes.
One firm of solicitors acts for both the lender and the borrower, which removes a round of correspondence and can shorten the legal stage. In August, 53 lenders on Broka offered dual representation on bridging.
An automated or desktop valuation uses data instead of a site visit, so it can come back in hours rather than weeks. It suits straightforward residential cases. In August, 55 bridging lenders on Broka offered one.
No. A DIP is still subject to valuation, underwriting, credit committee and legals, and the case can fall over at any of them. A credit-backed offer from a participating lender has the underwriting and valuation done first, so it is subject only to legals.
Enter the case details lenders screen on: loan amount, security, LTV or LTGDV, term, charge and borrower. Broka shows the lenders whose criteria fit, with rates, fees and any credit-backed option.
Yes. Create the case once and send it direct to the lender’s BDM. Replies and case status stay in one place.
No. The guides, videos and case of the month on this page are open to everyone. Searching lenders and placing cases needs a Broka account, which is £50 a month.
