Bridging Loan for House Purchase: A Guide for UK Property Investors

If you are a landlord or property investor in the UK looking to secure a new home quickly, a bridging loan for house purchase could be the solution. This short-term finance, also known as bridging finance or short-term finance, bridges the gap between buying a property and selling your existing one or securing long-term funding like a traditional mortgage or buy-to-let mortgage.

With rising demand in the UK market, understanding how these loans work is key for avoiding delays in auctions, property chains, or chain breaks. As of 2025, bridging loans are popular among investors due to their speed, with funds often available in days and the sector forecast to hit £12 billion.

They typically last up to 12 months (loan term) and can help in fast-moving property deals, including auction purchases, property development, renovation projects, or development projects.

What is a Bridging Loan for House Purchase?

A bridging loan, sometimes called a bridge or bridging loan or mortgage bridging loan, is a short-term secured loan used to cover a temporary funding gap when buying property.

In the UK, it is often used by landlords and investors to buy a house before selling another or while waiting for other funds, such as for property purchase, house purchase, auction property, or property refurbishment.

These loans are secured against property, like your current home or the one you are buying, and can be ideal for property buyers facing short-term cash flow issues.

Types of Bridging Loans Available in the UK

There are regulated and unregulated bridging loans. Regulated ones, overseen by the Financial Conduct Authority, are for residential properties you plan to live in, while unregulated are for investment properties like buy-to-lets or investment properties.

Residential bridging loans can go up to 75% loan-to-value (LTV), also known as Loan To ValueThe ratio of the mortgage amount to the value of the propert.... Options include first-charge loan (first-charge bridging loans) and second-charge loan (second-charge loans or second-charge mortgages).

Closed vs Open Bridging Loan

Closed bridging loans have a fixed end date, like when you know your house sale will complete. They are cheaper due to lower risk. Open bridging loans have no set end date, ideal for uncertain sales, but they cost more and suit scenarios like property flipping or buy-to-let investments.

First-Charge Bridging Loans

These are the main loan on a property with no existing mortgage. They are common for new purchases.

Second-Charge Bridging Loans

These sit behind an existing mortgage. They are useful if you don’t want to remortgageRefinancing an existing mortgage with a new mortgage. and can help with Let to BuyLetting out a property that the borrower previously lived in... schemes.

How Does a Bridging Loan Work for UK Property Buyers?

Bridging loans provide quick cash, often in 3-5 days, secured on property. You borrow to buy, then repay when you sell or refinance, with repayment terms based on your exit strategy or exit route.

Interest is charged monthly (interest payments or interest charges), and you might roll it up (Interest Roll Up) to pay at the end, avoiding monthly outgoings.

Step-by-Step Application Process

First, find a broker or lender, such as bridging specialists. Provide details on the property, your finances, credit history, credit score, and exit plan.

Exit Strategies for Repayment

Plan how to repay, like selling a property or getting a mortgage. Lenders need this upfront, and viable strategies reduce risks.

Selling Your Current Property

Use sale proceeds to clear the loan. Ideal for chain breaks or property chainA sequence of property purchases and sales that are linked t... issues.

Refinancing to a Buy-to-Let Mortgage

Switch to a long-term mortgage, like a buy-to-let mortgage or interest-only mortgage, once the property is ready.

Benefits of Using a Bridging Loan for House Purchase in the UK

These loans offer speed for competitive markets, like auctions or auction purchase. They are flexible for investors expanding portfolios, including HMO conversions, property flips, or business expansion. Availability extends to areas like Northern Ireland and Rural Scotland, though fewer lenders operate there.

Speed and Flexibility for Investors

Funds in days, no long waits like standard mortgages or traditional mortgages.

Ideal for Auction Purchases and Chain Breaks

Perfect for quick buys or when sales fall through, including land purchases or property in a poor condition needing structural refurbishments or property restoration.

Who Should Consider a Bridging Loan for House Purchase?

Landlords expanding portfolios or investors in quick deals, including property renovation or property buying journey. Eligible if over 18, UK resident, with good credit for better rates, but bad credit options exist.

Alternatives to Bridging Finance

Options include remortgaging, secured loan, equityThe difference between the value of the property and the amo... release, or traditional mortgages. Personal loans or family borrowing for smaller needs, or compare credit offers from high street banks and alternative lenders. Bridging loans are sometimes seen as a loan of last resort or short-term financing.

FAQs on Bridging Loans for House Purchase

What is a bridging loan for house buying?

A short-term finance option to help you buy a new property before selling your current one.

How much do bridging loans cost in the UK?

Rates typically start from 0.49% monthly on larger loans.

Are there alternatives to bridging loans for property?

Yes, such as traditional mortgages or secured loans.

Can landlords get bridging loans?

Absolutely — many use them to grow their property portfolios.

What are bridging loan rates in 2025?

The average rate is around 0.86% per month.

How fast can I get a bridging loan?

It can be arranged in just a few days, depending on urgency.

Next steps

If you are considering a bridging loan or want to explore your options, get in touch with our team of expert mortgage brokers. We’re here to help you find the right solution quickly and efficiently.