The Bridging Market Survey 2026 from Interpath and the Bridging & Development Lenders Association (BDLA) found that lenders felt the sector was competitive, but lower interest rates were supporting activity.
Most respondents – 67% – said the average monthly interest rate for bridging loans over the last 12 months was between the 0.75% and 1% banding, a rise from 59% last year.
Looking forward, 54% expected no change in origination volumes while 35% predicted growth. This showed sentiment had stabilised compared to the previous survey, where 75% forecast growth in the market.
Sentiment around institutional funding weakened, with 46% of respondents forecasting a decline. Some 37% of bridging lenders expected the quality of credit to deteriorate, indicating caution in the market despite stable loan terms and loan-to-value (LTV) levels.
Bridging lenders said independent brokers were the most important distribution channel, with 61% saying they were the most popular, up from 55% last year.
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The report said the continued growth highlighted the role of brokers in bridging, pointing to their flexibility and ability to support borrower needs.
Some 37% of respondents ranked independent brokers as the second-most important channel for origination, reinforcing their role in the market.
Some 22% of lenders said master brokers were most important, down from 27% last year, while a third of respondents placed them second.
Just 15% of bridging lenders named direct channels as key for origination, relatively flat on 16% in 2025, while the largest share of respondents – 33% – put them as third-most important.
Bridging is still an ‘attractive niche’
Stuart Mogg, head of FS debt and capital advisory at Interpath, said: “Short-term property finance continues to stand out as a highly attractive niche within specialty finance, underpinned by strong security, compelling yields and short-duration assets. While the sector has benefitted from significant liquidity in recent years, intensified competition, high-profile platform failures and macro uncertainty have led to a more selective and bifurcated funding environment. Some institutions are retrenching or focusing on larger, well-capitalised platforms, while others are seizing the opportunity to access assets that were previously highly contested.
“Despite a moderation in appetite, funders remain committed to the sector, and we continue to see it as a key area of focus for capital deployment – albeit with originators needing to work harder to secure it. In this environment, those lenders that can demonstrate robust governance, scalable platforms with a proven track record, and a diversified product offering will be best placed to attract funding.”
Bridging loans primarily used for refurbishment
Lenders said refurbishment was either the primary or secondary reason for borrowers taking a bridging loan, with 31% saying this was the top choice and 25% ranking it second. This was at the same level as last year’s survey results.
A fifth of respondents said rebridging was the most common use of bridging loans, aligning with the sentiment from 2025.
Mortgage delays were the least popular use of bridging finance, with 31% of respondents putting this as the fifth-most chosen reason, and just 4% placing it first.
Borrowers choosing slightly longer terms
The survey found that 48% of lenders said the average bridging loan term was 12-15 months, up from 43% last year.
Loans on terms of 9-12 months declined from 47% to 37%, which the report said pointed to less reliance on shorter-term finance.
No respondents reported loans longer than 15 months, despite this making up a tenth of responses last year, while 4% said there was an interest in bridging terms of 6-9 months.
Some 48% of respondents said the average bridging loan size in 2026 was above £600,000, down from 51% last year.
The report highlighted a shift towards mid-sized lending, with loans of £300,000-400,000 accounting for 17% of responses and loans between £400,000 and £500,000 representing 13%. Loans ranging from £200,000 to £300,000 made up 11% of responses.
The survey said larger loans were still more common, but there was a broadening in loan size distribution.
Challengers facing bridging lenders
Lenders cited increased competition and a decline in property sales or time to sell as the main hurdles for their business in the last 12 months.
The ability to access flexible and efficient funding was also cited, as was a decline in property values.
Respondents said the recent collapses of Century Capital and Market Financial Solutions made structural, operational and governance considerations a higher priority.
Funders and lenders expect more governance, transparency and reporting, a result of greater scrutiny from capital providers.
This could also prompt consolidation, respondents suggested, as larger lenders can meet these demands more easily while smaller firms could struggle.
Going forward, lenders expected to face similar challenges.
Adam Tyler, CEO of the BDLA, said: “This report comes at an important point in the continued evolution of the bridging and development finance sector. When we first started measuring the bridging market in 2005, the total loan book stood at around £300m. Today, the loan book of BDLA members alone stands at £11.5bn, demonstrating just how far the sector has come.
“Bridging and development finance has evolved from what was once viewed as a niche product into an essential component of the UK property market, supporting investors, developers, brokers and borrowers with flexible funding at critical moments. However, growth of this scale also brings responsibility to all those involved. As the market expands and attracts greater attention from regulators, policymakers, investors and customers, maintaining high standards and providing greater awareness has become more important than ever.”
