Best Bridging Loan Companies UK

We'll introduce you to the best bridging loan companies in the UK

Updated: May 18, 2024
Matt Crabtree

Written By

Matt Crabtree

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The process of selling a house isn't usually quick, and if you've already got your eye on a new property, you may require short-term finance.

A bridging loan is for property owners in that awkward middle phase of selling a property but also buying a new one; as the name suggests, it's a loan that allows property owners to bridge the financial gap until their property is sold.

There are various bridging loan lenders in the UK, so knowing where to look and who to consider for your bridging loan can be overwhelming.

In this article, we'll introduce you to the best bridging loan companies in the UK, the pros and cons of bridging loans, and we've compiled a list of the costs of a bridging loan.

ProviderScoreDetails
1. United Trust Bank★★★★★Click Here
2. LendInvest★★★★★Click Here
3. Precise Mortgages★★★★★Click Here
4. Octopus Real Estate★★★★Click Here
5. Greenfield Mortgages★★★★Click Here
6. Funding 365★★★★Click Here
7. MT Finance★★★★Click Here
8. Tuscan Capital★★★★★Click Here
9. UK Bridging Loans★★★★★Click Here
10. Affirmative Finance★★★★★Click Here

Bridging Loans Explained

Before introducing you to the best bridging loan providers on the market, we must first go over what a bridging loan is.

A bridging loan, sometimes known as a bridge loan, is a secured loan that allows property owners to use their properties as collateral for bridging finance to aid in buying a new property.

Bridging loan interest rates are typically higher than other types of secured loans. Property developers, homeowners and landlords usually apply for property finance to help buy properties or fund renovations on an existing property.

The different types of bridging loans:

  • Unregulated bridging loans: An unregulated bridging loan occurs when the property you've secured the loan against has yet to be resided in by yourself before or in the future.
  • Regulated bridging loans: A regulated bridging loan is when the loan is secured against the borrower's home.
  • Closed bridging loans: The loan time frame is agreed upon when you choose to take out a closed bridging loan, so when you start the loan, you and the lender will have set a closing date for when you need to repay the loan. Closed bridging loans tend to have lower interest rates because of a fixed repayment date.
  • Open bridging loans: Open bridging loans work differently from closed, as the term date isn't specified. The loan is completed at the property sale when the funds become available. Open bridging loans tend to have higher interest rates as there isn't a fixed repayment date, which is an added risk for the lender.
  • First charge bridging loan: If you own a property outright with no secured loans, the loan will be a first charge bridging loan. If you were not to pay the loan and the property was sold off, the bridging provider would receive repayment first. Interest rates are usually lower for a first-charge loan as there is less risk for the lender.
  • Second charge bridging loans: If you already have secured loans out on the property, the lender will receive the repayment second if multiple parties are involved. Second-charge loans have higher interest rates than the first charge.

Bridging Finance: Pros and Cons

There are pros and cons to bridging finance, and to help you decide if it's the right option for you, we've compiled a list of them all.

Pros

✔️ Flexible options: With a bridging loan, you have options. You can choose an open or closed loan; both give you different options on when to repay the loan. You can also decide how you pay the interest on the loan, and you can make monthly interest payments or defer payments until the loan term is complete.

✔️ Quick funding: When you cannot apply for a traditional mortgage or a personal loan, bridging loans are a relatively easy option to secure funds. The overall application process is quick. Once accepted, you should receive the funds in your bank account within two weeks.

✔️ Loan size: With unsecured loans, your credit history and income size determine the amount you can borrow and the interest you pay. However, a secured loan, like a bridging loan, determines the loan size by asset value. If the collateral you put forward is highly valued, you can take out a higher loan size.

✔️ More comprehensive access to properties: When you apply for a mortgage from a traditional bank or financial institution, you're limited to the types of property and conditions they can lend against. However, with a bridging loan, you have more flexibility with choice as there are fewer limitations. So, if you've found a property with less ideal conditions, you can use a bridging loan to buy it, allowing you to fix it into your dream property.

Cons

❌️ Many fees: Bridging finance can be expensive as it contains many different fees, such as legal fees, broker fees, valuation fees, exit fees, and others.

❌️ Short-term solution: The term for a bridging loan is typically up to 12 months, so you only have one year to repay the loan. 

❌️ Risk of losing collateral: When you take out a bridging loan, you must use collateral as your property or other securities. If you can't repay the loan, you risk losing your collateral.

❌️ High-interest rates: Interest rates for bridging loans are typically higher than if you were trying to secure a mortgage. The interest rate will vary between the types of bridging loans you choose.

Best Bridging Loan Companies — Reviews

Here are 10 best bridging loan companies:

1. United Trust Bank: Bridging Finance

  • Loan amount: £125,000 up to £15,000,000.
  • Interest rates: Personalised to each borrower.
  • Loan term: From 12 to 36 months, depending on loan type.
  • LTV: Up to 75%.

With United Trust Bank, the loan term differs depending on the bridging loan you take out. For example, you can choose up to 12 months for a regulated loan, whereas for an unregulated loan, it is up to 36 months. You can also choose for your bridging loan to be first, second, or a combination of both for charges.

No maximum age limit, early repayment charges, or monthly repayments are required. Interest is personalised to each applicant and is calculated daily for the loan duration. United Trust Bank allows dual legal representation and automated valuations. For certain applicants, there is a fast-track process available. Fees for a loan with United Trust Bank include a valuation fee and application fee.

The United Trust Bank's lending criteria include residential properties, houses in multiple occupations (HMO) and mixed-use securities allowed. Land with planning and commercial property considered. The security property must be in England, Scotland or Wales. Individual, corporate and trust borrowers are eligible, and a reliable and viable exit strategy must exist.

2. LendInvest: Bridging Finance

  • Loan amount: Up to £3,000,000.
  • Bridge loan rates: Up to 1.15%.
  • Loan term: Up to 12 months.
  • Loan to value (LTV): Up to 85%.

Choose between regulated and unregulated bridging loans with LendInvest. You can receive reliable funding for residential, land, refurbishments, semi-commercial, commercial and development exit bridging projects with LendInvest. Before applying, you can speak to a team of experts to explore your project in-depth and find out how LendInvest can support you best.

You can explore borrowing details with LendInvest's online Bridging Finance calculator. You can receive an indicative quote and see how much the gross loan, gross LTV, interest rate and other fees will cost. You can input different rates and borrowing amounts to explore different cost possibilities.

LendInvest gives a clear idea of the projects they back, including examples of properties and the different types of bridging loans they offer. There are options for both capital and mortgages. If you want to avoid applying directly, there are options for your intermediary party to use on your behalf.

3. Precise Mortgages: Bridging Finance

  • Loan amount: From £50,000 with no upper limit.
  • Interest rates: From 0.74%.
  • Loan term: From 12 to 18 months, depending on loan type.
  • LTV: Up to 75%.

Choose between regulated and unregulated bridging loans with Precise Mortgages. Applicants with multiple bridging loans are considered, and there is no maximum loan amount. The minimum term is one month, and the maximum is 12 for regulated bridging loans. The minimum term for an unregulated bridging loan is one month, and the maximum is 18.

There are no existing fees or early repayment charges. There is a £145 assessment fee on all products. Interest is retained for the entire loan's full term on regulated and non-regulated bridging. For non-regulated bridging, there is the option of monthly payments.

Precise Mortgages also offer bridging finance for limited companies, such as non-regulated bridging and refurbishment buy-to-let. Businesses must be registered as a limited company, have a UK-registered office and operate entirely in the UK. The criteria for Precise Mortgages for other borrowers include a minimum age of 21 and a maximum age of 85, and applicants must have a three-year UK residential history. HMOs may also apply for financing.

4. Octopus Real Estate: Bridging Loans

  • Loan amount: £50,000 up to £1,000,000.
  • Interest Rates: From 0.70%.
  • Loan term: Up to 24 months.
  • LTV: Up to 70%.

You can apply for residential and commercial loans with Octopus Real Estate Bridging Loans, the non-bank lender. Octopus Real State is a leading specialist real estate investor that offers bespoke customer-focused financing solutions across residential, commercial and development sectors.

The lender offers a fast-track service that includes reduced legal, due diligence, AVM, no search indemnity, and 70% LTV for purchases for loans ranging from £50,000 to £500,000. The Octopus Real Estate website has an unregulated and regulated bridging calculator, so you can determine how much each loan will cost to help you decide the best financial option.

There is no admin fee for regulated loans; however, there is a £350+ fee for unregulated loans. All loans have a 2% arrangement fee, a valuation fee of £75 per property, and legal fees vary. The only properties Octopus Real Estate don't finance are new builds.

5. Greenfield Mortgages: Regulated and Unregulated Bridging Loans

  • Loan amount: £26,000 up to £5,000,000.
  • Interest rates: Personalised to each applicant.
  • Loan term: Up to 12 months.
  • LTV: Up to 70%.

With Greenfield Mortgages, you can choose between regulated and unregulated bridging loans. Greenfield Mortgages is an FCA-authorised and regulated bridging lender that provides fast and competitive short-term property loans. Bridging finance is available for downsizing property, chain break, auction purchasing, and refurbishment.

Greenfield Mortgages consider all cases. Underwriting decisions are made within one hour, and funds are released into your account within seven days. No monthly repayments are required, and there are experienced customer relationship managers to help you along the way. You can receive a no-obligation quote if you wish to find out more precisely how much the loan will cost you.

6. Funding 365: Bridging and Development Loans

  • Loan amount: £100,000 up to £10,000,000.
  • Interest rates: From 0.79%.
  • Loan term: three to 24 months.
  • LTV: Up to 75%.

There are no early repayment penalties, loan acceptance fees, or hidden exit fees when you take out a bridging loan with Funding 365. Fees include a 2% arrangement fee, a broker omission form of 1.5%, market rate valuation and legal fees. Funding 365 is an independent bridging and development lender helping individuals with loans secured against properties across England and Wales with tailored funding solutions.

You use a bridging loan from Funding 365 for buying or refinancing, development exits and marketing, property refurbishment permitted, short-term cash flow requirements, and allowed securities are unregulated residential properties, HMOs, buy-to-lets, student accommodation, and holiday allows with no title restriction. Prohibited uses or land with or without planning, properties with adverse environmental conditions, owner-occupied, and farms or agricultural properties.

First-charge unregulated loans are available, residential short-lease and semi-commercial properties are considered, and applicants with adverse credit histories are considered, too.

7. MT Finance: First Charge and Second Charge Bridging Loans

  • Loan amount: £50,000 up to £10,000,000.
  • Interest Rates: From 0.99%.
  • Loan term: One to 24 months.
  • LTV: Up to 70%.

There are first and second-charge loans available with MT go/Finance. MT Finance is a leading property finance lender that offers a range of financing such as bridging loans, refurbishment loans, auction finance, property conversion and more.

There is a five-step process to getting a loan from MT Finance. There is the initial enquiry, and there are three ways you can apply depending on which you prefer: direct call with the team, enquiring email, or request a callback for a time that best suits you. Once your application has been reviewed, you will receive an offer within two business hours. Once you're happy with the offer, the valuation, the solicitors, and the funds will be released.

MT Finance takes on all credit histories, including borrowers with a history of areas and CCJS. There is no minimum credit score required or proof of income needed. Instead, the loan amount and rates are determined by property and plans.

8. Tuscan Capital: Unregulated Bridging for Personal and Semi-Commercial Properties

  • Loan amount: £150,000 to £10,000,000.
  • Interest Rates: From 0.53%.
  • Loan term: Three to 24 months.
  • LTV: Up to 75%.

With Tuscan Capital, there is unregulated bridging for personal and semi-commercial properties. Tuscan Capital is a property finance specialist that combines traditional lending standards with progressive commercial thinking. There are first-charge and second-charge loans available subject to the first mortgagee's consent.

All types of properties accepted include commercial, new-builds, HMO, semi-commercial, small block of flats and BTL portfolios. Loans are available to private individuals, corporate entities, Special Purpose Vehicles and off-shore limited companies. With appropriate Know Your Customer documentation and proof of residency, foreign nationals and ex-pats are considered.

9. UK Bridging Loans: First, Second, and Third Charge Options Available

  • Loan amount: From £25,000.
  • Bridging loan rates: From 0.55%.
  • Loan term: Six to 12 months.
  • LTV: Up to 75%.

UK Bridging Loans can offer the first, second, and third charge options. You can use a bridging loan to purchase a new home, develop property, break property chains and auction purchases. UK Bridging Loans offers all bridging loans, including commercial business loans.

With UK Bridging Loans, there is speedy completion, often within days, and pure equity-based lending is available for applicants up to 85. There are no monthly payments, and valuations are only sometimes required. Applicants with adverse credit are considered, and a free legal option is available.

To start the application process, you need to contact UK Bridging Loans, and you will receive an immediate confirmation or rejection and then receive a quote for the loan formatted and sent to you via email. You will receive a formal offer, a representative visit, dedicated underwriting, and then payment of funds.

10. Affirmative Finance: Property Finance for Unmortgageable Properties

  • Loan amount: £10,000 up to £3,000,000.
  • Interest rates: 1-1.5%.
  • Loan term: 12 months.
  • LTV: Up to 75%.

You can get property finance for unmortgageable properties with Affirmative. Types of unmortgageable properties include derelict property, non-standard construction, low value, short lease, structural issues, and properties with mortgage retention — affirmative offers bridging finance for all purposes.

Affirmative offers fast and flexible funding for individuals, investors, businesses and property developers. Bridging loans can be used for property purchases, downsizing, auction purchases and quick completions. You can also get finance for building, refurbishment, and extension projects.

You can contact Affirmative via a web form on their website detailing your plan and when you'd like to be contacted. You can arrange to be emailed or talk with a team member on the phone. An advisor will explore the process with you and the costs involved before you fill out an application.

How to Choose a Bridging Loan

You may want to look for cheap bridging loans, but there is much more than the cost of the loan to consider when deciding which one is best for your financial situation.

We've compiled a list of all the factors to take into consideration to help you decide on the right bridging loan:

  • Current property value: The loan amount for a bridging loan is determined by asset value. If the collateral you put forward is highly valued, you can take out a higher loan size. You can apply for bigger loans if your current properties have a high value.
  • Loan to value: The loan-to-value ratio is the loan amount compared to the property's value. The bigger the deposit you put down for the property, the lower the loan amount. Most lenders offer a maximum of 70% LTV. Some lenders may offer higher LTV of up to 80%.
  • Interest rate: You can expect to pay 0.5-2% monthly interest. However, some lenders will allow you to pay it at the end of the loan term.
  • Overall bridging loan cost: There are fees, interest, and the loan itself to consider when you take out a bridging loan. You need to determine if the affordability, and if the sale of your property falls through, can you still afford to repay the loan so you don't lose your securities.
  • Reputation of the bridging lender: Review all the bridging loan lenders you are considering, read reviews and ensure they're well established and genuine to avoid scams or lousy service.

Final Thoughts on Bridging Finance

Bridging loans are ideal for bridging the finance gap, and they're convenient if you're short of other finance options. Bridging loan interest rates can be off-putting, but using an online calculator to determine bridging loan costs will help you determine affordability. So,

A quick reminder before you go: when you get a bridging loan, it's essential to check in with your finances and the sale progress of your property to ensure you can still make all the required payments at the agreed-upon date.

Related Guides:

FAQs

Can You Get a 100% Bridging Loan?

What Is the Shortest Term for a Bridging Loan?

What Are the Benefits of Bridging Finance?

Are There Any Risks With Bridging Loans?

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