According to the latest Bridging Trends report, gross bridging lending is also “relatively stable” on Q2 last year at £201.8m.
The report said the lending figures show the sector’s “resilience and the consistent demand for bridging finance across various market conditions”.
Application volumes showed “steady growth”, going up 11% year-on-year to 460 in Q2 2025.
The report continued on to say that the average monthly interest rate for bridging loans contracted by 0.05% quarter-on-quarter to 0.81%.
The fall in borrowing costs can be linked to the fall in base and swap rates and reduced weighted average loan to value (LTV). This shows “increasing competitiveness and improved cost of capital”.
Aldermore Insights with Jon Cooper: Edition 5 – Feeling enthusiastic about next year’s run-of-the-mill market
Sponsored by Aldermore
The average completion time during the period was 48 days, which is an increase from 32 days in Q1 2025.
First charge loans made up 10% of loans, while second charge loans accounted for 90% of the market.
The average LTV stayed consistent at 54%, along with the average loan term at 12 months, which the report said showed “prudent lending practices”.
Looking at the purpose of the loan during the period, regulated refinance increased by 76% from Q1 2025 to 81 in Q2 2024, and unregulated finance rose by 63% to 49 over the same period.
Regulated refinance made up 18% of loans in Q2 2025, up from 10% in the prior quarter.
Investment purchase contracted from 23% in Q1 2025 to 16% in Q2 2025, while rebridge finance fell from 10% in Q1 2025 to 7% in Q2 2025.
Gareth Lewis, deputy CEO of MT Finance, said the latest Bridging Trends report “highlights a resilient market adapting to current economic conditions”.
“The reduction in interest rates combined with consistent application volumes suggests a healthy appetite for bridging finance. We are also seeing a clear shift in loan purposes, with refinance and auction purchases playing an increasingly significant role.
“We expect continued sector stability and favourable market conditions throughout 2025 as lenders continue to improve operational efficiency on all fronts,” he added.
Chris Whitney, head of specialist lending at Enness Global, continued: “The Bridging Trends Q2 data reflects a market that continues to mature, with borrowers increasingly using bridging finance as a proactive solution rather than a reactive one, utilising it as a tool to meet complex and time-sensitive requirements such as auction purchases.
“With interest rates edging down and application volumes growing, the sector is clearly demonstrating both adaptability and continued relevance in a changing financial landscape.”
Dale Jannels, managing director of Impact Specialist Finance, said: “We’re seeing several new brokers placing clients in the bridging market. Every day is a learning day, but now more brokers are exploring and educating themselves on the many benefits that bridging can bring to their client banks.
“I’m not surprised volumes have remained resilient, and I see this only increasing in the latter part of the year as the market demands more solutions away from the high street.”
