UK short-term lending grew despite long-term rate and economic uncertainty
Landlords and property investors are continuing to put their money into property investments even as global uncertainty clouds the wider economic picture.
The latest Bridging Trends data from MT Finance, published today, shows that UK bridging loan completions reached £181.8 million in Q3 2026 — a 5% rise on Q2’s £173.1 million — as borrowers found in short-term finance a tool reliable enough to act on, even when long-term conditions remain unclear.
The figure sits 13.2% below Q3 2025’s £209.4 million, reflecting a market that has not yet returned to its prior peak. But the quarterly growth tells a more important story: borrowers are not waiting for perfect conditions. They are moving.
Stay ahead of the UK mortgage market. Subscribe to the Mortgage Introducer daily newsletter for broker news, rate updates, and the industry latest delivered to your inbox every morning.
Landlords lead the charge
Purchasing an investment property was the single most popular use of a bridging loan in Q3 2026, accounting for 23% of all transactions — up from 18% in Q2. That shift points to a deliberate strategy among landlords who, unable or unwilling to wait for long-term mortgage rates to settle, are using bridging finance to secure assets now and refinance later.
In a market defined more by adaptation than decline, landlords across the UK have shown a consistent willingness to adjust their approach rather than exit altogether. Bridging lending, with its speed and flexibility, is a natural fit for investors who want to act in a window of opportunity, particularly in a flat market where sellers may be more willing to negotiate.
That appetite for purchases also showed up in the surge in first-charge bridges, which rose from 78% in Q2 to 87% in Q3. First-charge bridging — where the loan is secured as the primary debt against the property — reflects a buyer rather than a refinancer mindset. Second-charge bridges, by contrast, fell from 22% to 13%, as did heavy-refurbishment lending, which dropped from 10% to 6%. High building costs continue to make large renovation projects harder to justify for many.
Rates fall, lenders compete
One of the clearest signals in the Q3 data is what it says about lender behaviour. The average monthly interest rate fell from 0.81% in Q2 to 0.77% in Q3 — the fourth consecutive quarterly decline. At the same time, the average loan-to-value rose from 55% to 59%, meaning lenders are offering more against the same asset at a lower cost.
That combination of higher leverage and lower rates does not emerge in a market where lenders are pulling back. It emerges in one where they are actively competing for business.
Raphael Benggio, bridging director at MT Finance, said the figures reflect an industry continuing to back borrowers through a difficult period: “It is really encouraging to see the drop in both completion times and interest rates. This shows that despite the geopolitical landscape, lenders are continuing to support borrowers which helps to drive much-needed momentum.”
Data from Lendlord’s Q1 2026 Buy-to-Let Market Research, which tracked more than 75,000 landlord portfolios, found that 66% of landlords planned growth activity in 2026 — including acquisitions, refinancing, and refurbishments. That sentiment appears to be feeding through into bridging volumes, with investors using short-term lending to act while longer-term finance catches up.
Deals completing faster
Borrowers also benefited from shorter waits in Q3. The average completion time fell from 46 days in Q2 to 41 days — five fewer days from application to funds. The average loan term held steady at 12 months, in line with the Financial Conduct Authority’s (FCA) definition of a bridging loan.
Jordan McBriar, chief executive of Adapt Finance Group, described the market as one of quiet resilience: “It feels as if confidence is creeping back in and there is a want to make things work, albeit with some challenges. It is tough out there, but it is also making people focus on delivery, which can only be a good thing for when market conditions improve.”
Fergus Allen, head of bridging at Clifton Private Finance, pointed to competitive pressure as the more likely driver of improvements: “Whether this is due to sustainable market growth or increased competition between lenders is up for debate — my opinion is it’s most likely the latter.”
The UK housing and property investment market has demonstrated resilience despite a prolonged period of elevated interest rates, and the Q3 bridging data adds another data point to that picture. For borrowers who know what they want and can structure an exit, the market is open — and lenders, for now, are keeping it that way.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
