Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Bridging lenders keep "riding to the rescue" amid rate volatility
Bridging finance is increasingly being used by buyers, sellers and developers to set their own timetable as mortgage rate volatility and unreliable completion timelines disrupt the UK property market. Mortgage Strategy reports that regulated bridging, once seen as a fallback option, has become a common method of keeping otherwise at-risk purchases moving.
A volatile rate environment
The report describes mortgage rates that seem to change "blink and it will have changed", with ups and downs dominating pricing in recent months amid persistent global economic volatility. Ten- and 30-year gilt yields have risen to their highest levels in decades, while the Bank of England base rate has held at 3.75% for the entire year so far. The author suggests it is only a matter of when, not if, the Monetary Policy Committee majority votes for an increase.
Swap rates have also trended gradually upwards, with lenders pushing rates up every time geopolitical tensions flare. The volatility has had unintended consequences: decisions in principle expiring before an application can be made, products being withdrawn, and rates being adjusted midway through structuring finance on a property.
A shaky residential market
Rightmove data for August shows newly listed house prices down around 2% month on month and down 1% year on year, with transaction volumes still fairly weak. The report suggests more homeowners and developers are likely to turn to bridging to complete on a timeline that works for them.
While sentiment has been that the market has bottomed out, there are signs of a potentially extended plateau. A growing gap has opened between the time properties spend on the market in the North versus the South, with more positive house-price projections in northern regions and higher demand. According to Zoopla, the 10 fastest-selling areas are all in Scotland.
One positive cited is new prime minister Andy Burnham's ruling out of stamp duty reform in October's Autumn Budget, meaning buyers and sellers have no property tax change to worry about in the coming months.
Chain breaks and developer exits
Timelines are harder to rely on, whether due to rate fluctuations, a pending base-rate increase, selling times, valuation miscalculations or investor sentiment. The result has been more chain breaks than usual, sellers holding out for higher values than they may realistically achieve, and buyers and investors biding their time.
More developers are exiting their development loans through bridging, with downvaluations and market volatility described as a thorn in developers' sides in 2026.
What the numbers show
FCA data shows the regulated bridging market wrote £1.83bn across 4,691 loans in 2025, roughly double the 2021 figure. Figures for early 2026 in England suggest volumes are running slightly ahead of last year. As long as volatility persists and chain breaks remain common, the report concludes, interest in bridging finance is likely to keep growing.
Source: Mortgage Strategy