The year has been defined by economic uncertainty, shifting property market dynamics, and the implementation of Consumer Duty regulations.

Yet, bridging finance continues to demonstrate a substantial amount of value as a versatile, short-term solution for property transactions.

As we look ahead to 2025, we anticipate several key trends and challenges that will shape the industry.

The role of regulated bridging in a tight housing market

The latest data from the Bridging & Development Lenders Association (BDLA) indicates that bridging completions reached a new record of £1.79bn in Q3 this year, marking a 2.6% rise compared to the second quarter, reflecting its vital role in helping homeowners and investors navigate the property market.

Chain breaks remain one of the key drivers of regulated bridging, as buyers increasingly turn to this solution to secure their next property before selling their current home.

With housing supply still tightly constrained, homeowners are often forced to secure their next property before selling their current one.

Bridging finance provides a lifeline in these scenarios, allowing clients to move into their dream homes without precariously waiting for a buyer.

This trend is highly unlikely to diminish in 2025. As competition for properties remains acute, especially in urban areas and undervalued regional markets, brokers should be prepared to educate clients on the advantages of regulated bridging for chain breaks and time-sensitive purchases.

Meeting demand for yield-driven investments

One of the key themes for 2024 has been the spike in professional investors seeking opportunities in HMOs and commercial-to-residential conversions to maximise rental yields.

The North and Midlands, where landlord exits are creating undervalued properties, are expected to see an increase in activity.

Bridging finance is well-positioned to support these acquisitions, enabling investors to secure properties quickly and finance necessary refurbishments as a result.

We also foresee growing demand for funding linked to EPC improvements, as stricter energy performance regulations take effect.

Investors and landlords will look to bridging loans to cover renovation costs, ensuring their properties remain compliant and attractive to tenants.

It is impossible to ignore the fact that interest rate movements will remain a critical factor shaping the bridging market.

While the sentiment is that the Bank of England may begin reducing rates, these changes are likely to be slow and gradual.

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Higher base rates have already discouraged mainstream mortgage borrowing, making bridging finance an attractive alternative for clients waiting for better long-term financing conditions.

Rate volatility also drives demand for bridging, as it offers flexibility compared to fixed-term loans. Borrowers navigating uncertain timelines or purchasing before selling their existing homes will continue to rely on the adaptability that bridging provides.

Shifts in borrower profiles

The cost-of-living crisis has influenced borrower behaviour, with more individuals incorporating bridging into their broader financial strategies.

Downsizers, for example, are likely to remain a key group, using bridging to free up equity while navigating lifestyle changes.

Upsizers, property developers, and investors seeking distressed opportunities will also drive demand.

At StreamBank, we’ve seen growing interest in auction purchases, particularly from professional investors.

Auctions provide a fast-paced route to property acquisition, and bridging finance is often the ideal tool to make these transactions possible.

Balancing innovation and service

In 2024, Consumer Duty regulations reinforced the need for transparency and fairness in customer interactions.

We’ve embraced these principles at StreamBank, ensuring that our clients receive not only competitive rates but also tailored support throughout their transactions.

Looking ahead, we believe the key to success lies in balancing innovation with personal service. For instance, digital tools such as AI can streamline processes, but the human element remains vital.

Brokers play a critical role in guiding clients through the complexities of bridging finance, discussing exit strategies, and ensuring the right product for each scenario.

Sustainability as a driving force

The push for sustainability will be a significant driver of bridging activity in 2025. Retrofitting properties to improve EPC ratings aligns with both regulatory requirements and market demand.

At StreamBank, we’re fully committed to supporting clients as they undertake these renovations, recognising the role bridging finance can play in building a greener, more energy-efficient market place.

The bridging finance sector is well-positioned to ride both the challenges and opportunities of 2025.

By addressing the diverse needs of borrowers — from downsizers and investors to those tackling sustainability goals — our industry can continue to deliver meaningful solutions.

As we look to the year ahead, one thing is clear: bridging finance isn’t just a stopgap—it’s an enabler of possibility in 2025.