Bridging stays resilient as borrowers sharpen exit focus

While industry data shows the UK bridging market pulled back in the first quarter of 2026, one lender says demand for speed and flexibility has not let up – and points to a lending environment that continues to work in bridging's favour.

Kevin Gibson (pictured top), operations director at Ascot Bridging Finance, told Mortgage Introducer the market has remained resilient despite ongoing uncertainty around interest rates and the wider economic backdrop, with borrowers continuing to turn to specialist lenders when traditional routes prove too slow or too rigid.

New figures from the Bridging & Development Lenders Association (BDLA) show completions across the sector totalled £1.8 billion in Q1 2026, down from £2.5 billion in Q4 2025. Applications fell from £11.7 billion to £9.9 billion over the same period, while total lender loan books stood at £11.5 billion compared with £13.4 billion at the end of last year. Average loan-to-value (LTV) ratios eased to 56.64% from 58.64% in Q4 2025.

"From a lender's perspective, the bridging market has remained resilient despite the ongoing uncertainty around interest rates and the wider economic backdrop," Gibson said. "We've seen continued demand from borrowers who need speed and flexibility, particularly where traditional lenders are unable to move quickly enough or where cases fall outside standard criteria."

Caution takes hold

Gibson acknowledged the slowdown in activity but placed it in the context of wider economic conditions that have affected sentiment across the sector. Borrowers, he said, are weighing their options more carefully than they were 12 months ago.

"We have indeed noticed the slowdown reported by the Bridging & Development Lenders Association in the first quarter of 2026," he said. "The market has been adjusting, with uncertainty around interest rates and economic shifts prompting borrowers to act more cautiously and prioritise strong exit strategies."

That shift in borrower behaviour is one of the defining features of the current environment. Where speed was once the dominant concern for those turning to bridging finance, viability of the exit route has moved to the forefront of both borrower thinking and lender underwriting. BDLA data published earlier this month showed the Q1 figures marked a significant shift from the same period in 2025, when completions stood at £2.8 billion.

Adam Tyler, chief executive of the BDLA, said the moderation was not unexpected. The association described the sector as remaining well positioned, with disciplined underwriting and strong capital availability continuing to support the market's foundations.

What the rest of 2026 holds

Looking ahead, Gibson is measured in his outlook, identifying both the conditions needed for recovery and the disciplines that will define which lenders and borrowers thrive.

"Looking ahead to the rest of the year, we expect activity to remain strong, although borrowers are becoming more cautious and increasingly focused on viable exit strategies," he said. "For lenders, the emphasis is firmly on disciplined underwriting, realistic valuations, and supporting experienced borrowers with clear plans."

The factors that could accelerate a recovery are, in Gibson's view, largely structural. Greater rate clarity from the Bank of England, improved access to development finance, and more flexible lending criteria would all help underpin activity in the second half of the year. He also points to the relationship between lenders and brokers as an area with room to improve.

"Further collaboration between lenders and brokers would also streamline the process for borrowers, supporting the sector's adaptability and resilience to bounce back," he said.

That theme of broker–lender co-ordination has featured prominently in recent industry discussion. Specialist brokers have reported strong pipelines despite the BDLA's Q1 figures, pointing to bridging's role as an alternative route when mainstream lending cannot deliver the speed or flexibility a case demands.

Bridging's place in a complex market

For Gibson, the underlying logic of bridging finance remains as relevant as it has ever been, and perhaps more so given the current lending environment.

That emphasis on underwriting quality, realistic asset valuations, and experienced borrowers with credible exit plans reflects a broader maturation of the bridging sector that the BDLA has also highlighted. As capital providers become more selective in their approach to the bridging market, the gap between well-structured deals and poorly planned ones is widening.

For Gibson, the sector's direction of travel remains clear. "Overall, bridging continues to play a vital role in the market, especially as a short-term solution in a more complex lending environment."

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