The bridging sector continued to show resilience in the final quarter of 2025, with borrower demand increasing and lending volumes remaining at historically strong levels, the latest data from the Bridging & Development Lenders Association (BDLA) shows.
Despite this, applications for bridging finance in the three months to the end of December amounted to £11.7 billion, representing a 2.6% increase on the third quarter of 2025 and highlighting the continued demand for short-term property finance.
Completions totaled just under £2.5 billion, down 2.1% on the previous quarter, while lenders’ total loan portfolio stood at £13.4 billion, slightly down from September’s record high of £13.7 billion.
Although there was a small dip on a quarterly basis, loan portfolios remain significantly high compared to historical levels and continue to reflect the size and maturity of the sector.
Loans in default also fell 6.2% quarter-on-quarter, reflecting stable credit performance and continued cautious underwriting across the market.
Development loans increased during the quarter, with £420.3 million in development loans, compared to £376.8 million in the third quarter.
Meanwhile, second charge borrowing was £145.8m, slightly down on the previous quarter’s £155.2m.
The average loan-to-value ratio increased to 58.6%, compared to 57.3% in the previous quarter, which BDLA said reflects continued lender confidence while remaining within responsible underwriting parameters.
BDLA chief executive Adam Tyler said: “Demand for bridging and development finance remains strong, reflecting the important role that short-term lending plays in supporting property investors, developers and homeowners who need flexible financing solutions.”
“Our credit data for the fourth quarter of 2025 is particularly pleasing given the market uncertainty caused by speculation around the autumn budget.”
“What we are also seeing in the market is a continued shift towards quality, with brokers and borrowers increasingly choosing lenders with strong track records, robust underwriting and clear professional standards.”
“That focus on professionalism and responsible lending is critical to the long-term success of the sector. The reduction in loan defaults this quarter is a further indication that lenders are disciplined in maintaining their underwriting policies while continuing to support real estate market activity.”