The UK bridging and development finance market slowed in the first quarter of 2026, with completions falling 28% to £1.8 billion and applications falling 15% to £9.9 billion, according to the latest figures from the Bridging & Development Lenders Association (BDLA).
At the end of March, lenders’ loan portfolios stood at £11.5 billion. Average Loan-to-Value (LTV) ratios also fell, from 58.64% in Q4 2025 to 56.64% in Q1 2026, as lenders continued to take a cautious approach to risk.
The BDLA said the slowdown follows a long period of growth and against the backdrop of economic and geopolitical uncertainty. However, the sector remains supported by strong demand, disciplined underwriting and continued confidence from lenders and investors.
Development loans reached £276.5 million during the quarter, down 34% from £420.3 million in the fourth quarter of 2025. Second charge loans fell 10% to £131.3 million, compared to £145.8 million in the previous quarter.
The BDLA’s quarterly survey is compiled by independent auditors based on data submitted by members of the lenders. It provides one of the most detailed snapshots of activity in the UK bridging and development finance market.
BDLA chief executive Adam Tyler said: “After a sustained period of strong growth, it is not surprising that the market is moving into a more measured phase. The first quarter of 2026 has been shaped by a number of wider economic and global factors, and these have inevitably affected confidence and activity in the property and mortgage sectors.
“However, the bridging and development finance sector remains in good shape, with strong fundamentals, experienced lenders and a clear role to play in supporting borrowers who need flexible, time-sensitive financing solutions.
“In the wider mortgage market, the last twelve months have been challenging. Brokers, lenders and borrowers have all had to deal with uncertainty around interest rates, property values, transaction volumes and the wider economic outlook. In that context, some slowdown in activity was expected.
“What gives us confidence is the continued professionalism of the sector. Lenders are becoming disciplined in their underwriting, capital remains available for high-quality lending platforms and there is a growing focus on governance, transparency and sustainable growth.
“The market is also maturing. This means that growth will not always be linear, but the long-term direction of development remains positive. Bridging and development finance is now an established and essential part of the UK property finance landscape. The BDLA will continue to support the standards, data and representation needed to ensure the sector grows responsibly, and BDLA membership continues to provide a mark of quality for others to follow.”