Bridging Trends data points to stable volumes and cautious borrowing ahead of Iran conflict
Purchasing an investment asset remained the most common use of bridging finance in the first quarter of 2026, representing 22% of all transactions — unchanged from Q4 2025, according to the latest Bridging Trends data.
Unregulated bridging loans increased their share of the market, rising from 56% in Q4 2025 to 59% in Q1 2026, the highest level recorded since Q4 2021, when the figure stood at 64%.
The data suggests that landlords and investors were gaining confidence and acting on a period of relative stability prior to the start of the conflict in Iran at the end of February. The full impact of that conflict on the market is not expected to be apparent until Q2 figures are available.
First charge bridging loans also gained ground, accounting for 91% of transactions in Q1, up from 89% in Q4. This matches the joint-highest proportion recorded since Bridging Trends began collecting data in 2015.
The corresponding decline in second charge activity was reflected in falling demand for heavy refurbishment finance and business injection funding, which dropped from 11% to 6% and from 8% to 4% respectively between Q4 and Q1.
Unregulated refinance activity saw a notable increase, more than doubling from 5% of transactions in Q4 to 11% in Q1. This may reflect borrowers holding on bridging products while awaiting more favourable conditions before committing to longer-term finance.
Meanwhile, mortgage criteria search platform Knowledge Bank recorded a rise in broker searches for "grade 2 listed building" criteria — from 31 in Q4 to 89 in Q1 — and for "development exit products", which climbed from 52 to 99 over the same period, indicating continued interest in renovation and exit strategies among some borrowers.
Total lending by Bridging Trends contributors reached £199.2 million in Q1, broadly flat compared with £199.9 million in Q4 2025. The average loan-to-value ratio fell from 56% to 52%, which likely contributed to the average monthly interest rate easing from 0.83% to 0.82%. The average loan term remained at 12 months, while average completion time edged up by one day to 53 days.
"It is encouraging to see that bridging lending remained stable going into 2026," said Raphael Benggio (pictured right), bridging director at MT Finance.
"Investors and landlords in particular seemed to be maximising bridging's potential in Q1, and the dip in LTV shows that borrowers were careful about not overburdening themselves.
"We will have to wait and see to get a real measure of how the conflict in Iran has affected the market but the bridging sector will continue to offer solutions to landlords, business owners and homeowners alike."
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