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The Pros and Cons of Bridging Loans for UK Property Investors

bridging loans for property investors

Property investors in the UK have no shortage of options where potential sources of funding are concerned, though increasingly, new and established investors alike are turning to short-term bridging finance.

Bridging loans differ from mainstream loans in that they are designed to be repaid within a period of 1-18 month. The funds required can also be made available in a matter of days, rather than weeks.

But what are the pros and cons of bridging loans that should be considered by all UK property investors?


  1. Bridging finance is fast to arrange

Depending on your requirements and the lender you work with, it is perfectly possible to arrange and receive a bridging loan in less than a week. This makes bridging finance ideal in time-critical situations, where waiting weeks for a decision is simply not an option.

  1. No monthly repayments necessary

In most instances, bridging loans are repaid as one lump-sum payment on a date agreed at the time the loan was issued. This means that in the meantime, no monthly repayments are necessary. The agreed term of the loan can also be quite flexible – usually 1 to 18 months, though sometimes longer upon request.

  1. Almost no limitations

This applies to both the amount of money available and the intended purpose for the funds. A bridging loan can be used for almost any legal purpose whatsoever, while maximum loan amounts are limited only by the value of the security provided by the applicant.

  1. A poor credit rating can be over looked

As eligibility is determined primarily on the basis of security, a poor credit history will not always result in a refusal. Bridging loan applications are usually evaluated by way of overall merit – not assessed on the basis of credit score alone.

  1. Cost-effectiveness

When a bridging loan is repaid quickly, it can be more cost-effective than a comparable loan or mortgage & often with no early exit fees applicable.


  1. High long-term interest rates

Bridging loan interest rates can be as low as 0.5% per month, or even less. This makes bridging finance exceptionally affordable when loans are repaid promptly, though potentially expensive where loans are taken out over longer terms.

  1. Additional fees

Additional fees and charges vary significantly from one lender to the next, which is why it is important to compare the market in full. While some rates are as much as 1.5% of the total balance by way of various fees and levies, others impose next to no additional costs whatsoever.

  1. Requirement for security

The nature of bridging finance is such that you will not be considered eligible unless you have sufficient security to cover the costs of the loan. In addition, you risk forfeiting ownership of your assets in the event that the loan is not repaid as agreed.

Independent Broker Support…

Getting the best deal on a bridging loan means comparing the market in its entirety and assessing all available options. This is where independent broker support can prove invaluable, ensuring your requirements are paired with a flexible and affordable loan from a reputable provider.

For more information or any of the above or to discuss bridging loan applications in more detail, contact a member of the team at UKbridgingloans.uk today.

UK Bridging Loans Limited does not undertake/enter into any type of FCA regulated loans as set out in the FCA Regulated Activities Order.
Registered office: 7 Kevern Close, Wigston, Leicester, LE182GR.
All calls are recorded for training and compliance purposes.

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