What is Regulated Bridging Finance?

Regulated bridging finance is a short-term loan secured against your owner-occupied residential property. It “bridges” the gap between purchasing a new property and receiving funds from the sale of your existing property.

Key characteristics:

• Owner-occupied only:The property must be (or will be) your primary residence
• Short-term:Maximum 12 months (cannot be extended)
• Secured against property:The lender takes a legal charge on your new property
• Fast funding:Can complete in 2-4 weeks (sometimes faster)
• FCA regulated:Authorised and regulated by the Financial Conduct Authority
• Maximum LTV:75% of property value
• Transparent pricing:All costs clearly disclosed upfront

How it works:

• You identify a property you want to purchase (your new home)
• You provide a 25% deposit from savings or other sources
• You apply for a bridging loan with me to cover the remaining 75%
• The lender completes a valuation and underwriting
• The loan completes and funds are released
• You sell your existing property
• Sale proceeds repay the bridging loan (plus interest and fees)

When Do You Need Regulated Bridging Finance?

1. Broken Property Chain

The problem: Your purchase is ready to complete, but the sale of your current property is delayed.

The impact: You lose the property you want to buy, or face penalties for not completing on time.

Bridging solution: Use a bridging loan secured against your new property to complete the purchase now. Repay the loan when your current property sale completes.

Example:

• New property purchase: £300,000
• Your deposit (25%): £75,000
• Bridging loan needed (75% LTV): £225,000
• Current property value: £280,000
• Outstanding mortgage: £150,000
• Expected sale proceeds: £130,000
• Timeline: 8 weeks until your current property sale completes

Exit strategy: Use £130,000 from sales proceeds + a £95,000 residential mortgage to repay £225,000 bridging loan

2. Buying Before Selling

The problem: You want to move immediately but haven’t sold your current home yet.

The impact: You miss out on the property you want, or you’re forced to sell quickly at a lower price.

Bridging solution: Use a bridging loan secured against your new property to complete the purchase immediately. Repay the loan when your current property sells.

Example:

• New property purchase: £400,000
• Your deposit (25%): £100,000
• Bridging loan needed (75% LTV): £300,000
• Current property value: £350,000
• Outstanding mortgage: £0
• Expected sale proceeds: £350,000
• Timeline: 12 weeks until your current property sale completes

Exit strategy: Use £300,000 from the sales proceeds to repay £300,000 bridging loan

3. Time-Sensitive Purchase

The problem: You need to complete a purchase quickly (relocation for work, family circumstances, time-limited opportunity).

The impact: You miss the opportunity or lose the property to another buyer.

Bridging solution: Use bridging finance secured against your new property to complete immediately. Repay from sale proceeds once your current property sells.

Example:

• New property purchase: £250,000
• Your deposit (25%): £62,500
• Bridging loan needed (75% LTV): £187,500
• Current property value: £220,000
• Outstanding mortgage: £120,000
• Expected sale proceeds: £100,000
• Completion needed: 3 weeks
• Timeline: Complete in 2 weeks, repay from sale proceeds within 6 months

Exit strategy: Use £100,000 from sale proceeds + a £87,500 residential mortgage to repay £187,500 bridging loan

Important: Regulated vs. Unregulated Bridging

There are two types of bridging finance—regulated and unregulated. They are fundamentally different.

Feature	Regulated Bridging	Unregulated Bridging
Regulation	FCA regulated	Not FCA regulated
Property type	Owner-occupied residential only	Investment/commercial properties
Maximum term	12 months (cannot be extended)	1-36 months (varies by lender)
Maximum LTV	75%	70-75% (up to 100% with addiotnal security)
Interest rates	0.5-1.5% per month (6-18% p.a.)	1-3% per month (12-36% p.a.)
Consumer protection	Full FCA protections	Limited protections
Best for	Homeowners in property chains	Property investors, developers

How Much Can I Borrow?

Regulated bridging loan amounts depend on:

• Property value(the new property being purchased)
• Loan-to-Value (LTV)– Maximum 75% of the new property value
• Your deposit– Typically 25% of the purchase price
• Exit strategy– How you’ll repay the loan (sale proceeds from your current property)

How LTV is Calculated:

The bridging loan is secured against your new property:

Maximum bridging loan = 75% × New property value

Your deposit required = 25% × New property value

Example Calculation:

New property purchase: £300,000

Your deposit (25%): £75,000

Maximum bridging loan (75%): £225,000

Minimum & Maximum Loan Amounts:

• Minimum loan: £50,000 (some lenders accept £25,000)
• Maximum loan: £500,000+ (depending on lender)
• Most common range: £100,000-£300,000

Bridging Finance Costs & Fees

Interest Rates

Factors affecting your rate:

• Loan-to-Value (LTV)– Higher LTV = higher rate
• Exit strategy– Confirmed sale = lower rate
• Loan amount– Larger loans may get better rates
• Credit profile– Excellent credit = lower rate
• Typical range:5-1.5% per month (6-18% per annum)

Arrangement Fees

Typical range: 1-3% of loan amount

Example: £200,000 loan × 2% = £4,000 arrangement fee

Other Costs

Cost	Typical Amount
Valuation	£300-£1,000
Legal fees (lender’s solicitor)	£500-£1,500
Survey (optional but recommended)	£400-£1,500
Broker fee (my fee)	1% of loan amount
Exit fee (redemption, discharge)	1% of loan amount (not all lenders charge a exit fee)

Total Cost Example

Scenario: £200,000 bridging loan for 3 months at 1% per month

Cost	Amount
Interest (1% per month × 3 months)	£6,000
Arrangement fee (2%)	£4,000
Valuation	£500
Legal fees	£1,000
Broker fee (1%)	£2,000
Exit fee	£2,000
Total cost	£15,500
Effective cost	7.75% of loan amount

Bridging Finance Timeline

How Fast Can You Get Funded?

Typical timeline for regulated bridging:

Stage	Timeline
Initial consultation & application	Day 1
Lender review & valuation arranged	Days 1-3
Property valuation completed	Days 3-7
Underwriting & approval	Days 7-10
Legal documentation prepared	Days 10-14
Completion & funds released	Days 14-21
Total time to funding	2-3 weeks

Fastest cases: 7-10 days (straightforward residential purchases with confirmed sale)

Slower cases: 4-6 weeks (if additional information or clarification is needed)

Important: 12-Month Maximum Term

Your regulated bridging loan must be repaid within 12 months. This term cannot be extended. Your exit strategy must show how you’ll repay within this timeframe—typically through the sale of your current property.

Regulated Bridging Finance Process

Step 1: Initial Consultation

Contact me and we’ll discuss:

• Your new property purchase (address, price, completion date)
• Your deposit available (typically 25% of purchase price)
• Your current property (value, outstanding mortgage, expected sale timeline)
• Your exit strategy (when you expect to sell and repay the loan)
• Your credit profile and financial situation

Outcome: I’ll confirm if regulated bridging finance is suitable and provide an indicative quote.

Step 2: Formal Application

Once you’re ready to proceed, I’ll arrange a formal application with:

• Your personal details and financial information
• Property details (new property being purchased and current property)
• Exit strategy confirmation
• Proof of funds for 25% deposit

Documents needed:

• ID and proof of address
• Last 3 months’ bank statements
• Last 2-3 years’ tax returns (if self-employed)
• Mortgage redemption statement (current property)
• Purchase agreement or estate agent valuation (new property)
• Proof of deposit funds

Step 3: Valuation & Underwriting

The lender will:

• Arrange a valuation of the new property being purchased
• Review your application and financial profile
• Assess your exit strategy (expected sale timeline of current property)
• Confirm the loan amount and terms

Timeline: 7-10 days

Step 4: Mortgage Offer & Legal Documentation

Once approved, the lender will:

• Issue a formal mortgage offer
• Instruct their solicitor to prepare legal documentation
• Confirm the completion date and funds transfer

Timeline: 3-7 days

Step 5: Completion & Funds Release

• Your solicitor and the lender’s solicitor exchange documents
• Funds are transferred to your solicitor’s client account
• Your solicitor completes your property purchase
• Bridging loan is registered as a legal charge on your new property

Timeline: 1-3 days

Regulated Bridging Finance FAQs

Can I get bridging finance if my sale is delayed?

Yes, that’s the primary use of regulated bridging finance. If your sale is taking longer than expected, bridging finance can help you complete your purchase on time. You’ll repay the loan when your sale completes.

What if my sale falls through?

This is a key risk. If your sale falls through, you’ll need an alternative exit strategy (refinance to a residential mortgage, additional funds from savings, sell another asset). Discuss this with me before applying—lenders need to know your backup plan.

How long can I keep a bridging loan?

Regulated bridging loans are designed for a maximum of 12 months. This term cannot be extended. Your exit strategy must show how you’ll repay within 12 months, typically through the sale of your current property.

Can I repay the bridging loan early?

Yes, most bridging loans allow early repayment without penalty. If your sale completes early, you can repay the loan and save on interest.

What’s the difference between first charge and second charge bridging?

• First charge:The bridging lender has first legal claim on the property (most common for regulated bridging)
• Second charge:Another lender has first charge (e.g., your existing mortgage), and the bridging lender has second charge (higher interest rates, more restrictive)

Most residential regulated bridging is first charge on the new property being purchased.

Can I get bridging finance with bad credit?

Possibly, but it depends on the severity and your exit strategy. If you have a strong exit strategy (e.g., confirmed sale with solicitors instructed), some lenders will accept adverse credit. Interest rates may be higher. Speak to me about your specific situation.

What properties can I use for regulated bridging?

Regulated bridging is for owner-occupied residential properties only—properties that are (or will be) your primary residence. This includes detached houses, semi-detached houses, terraced houses, flats, and bungalows.

Do I need a 25% deposit?

Yes, typically regulated bridging lenders require a 25% deposit, with the bridging loan covering the remaining 75% of the purchase price.

Why Choose Capital 8 Finance for Bridging Finance?

Specialist Bridging Broker

I specialise in regulated bridging finance for homeowners caught in property chains or needing to move quickly. I understand the stress of delayed sales and time-sensitive purchases, and I’ll find you the right solution fast. We can also help you with refinancing the bridging loan as well.

Whole-of-Market Access

I have access to specialist regulated bridging lenders including:

• Together Money
• United Trust Bank
• LendInvest
• Masthaven
• Precise
• West One
• MT Finance
• Octopus Capital
• Streambank
• Affirmative Finance
• Glenhawk
• Bridging Finance Solutions
• Alternative Bridging Corporation

This is only a selection of lenders available to me.

Fast Turnaround

• Applications processed within 24-48 hours
• Valuations arranged immediately
• Funding typically within 2-3 weeks
• Emergency funding available for time-sensitive purchases

Transparent Pricing

• Broker fee:1% of loan amount (e.g., £2,000 on a £200,000 loan)
• Payable:On completion only (no upfront fees)

All other costs (interest, arrangement fees, legal fees, valuation) are clearly explained upfront

Expert Guidance

I’ll help you:

• Assess whether regulated bridging finance is right for you
• Understand your exit strategy and 12-month repayment timeline
• Navigate the application process
• Manage your bridging loan until completion

Get Expert Bridging Finance Advice

Whether you’re caught in a broken chain or need to move quickly, we can help you access regulated bridging finance quickly and affordably.

Capital 8 Finance – Fast-track your property purchase with regulated bridging finance.

Contact us for a free, no-obligation consultation to discuss your bridging finance needs.