Bridging and commercial lending gain ground in broker models

Once considered niche, bridging and commercial lending are becoming essential tools for mortgage brokers adapting to a changing property finance market. Elliot Cotterell, director at Cotterell & Cotterell, said rising complexity in landlord portfolios and reduced returns in traditional buy-to-let have opened the door to more specialist funding.  

"Traditional mortgages aren't necessarily going to allow you to carry out extensive adaptations to a home, especially where you're impacting the structural integrity of the property," Cotterell said. "You have to think outside of the box and look at more specialist finance routes. Bridging, for example, is not just a stopgap, it’s absolutely essential for portfolio landlords or investors doing conversions, like offices under permitted development."  

Brokers face a mindset hurdle  

For many residential brokers, the shift into commercial and bridging territory is less about regulation and more about confidence. Cotterell believes the barrier isn't capability, but unfamiliarity.  

"The biggest hurdle is mindset," he said. "A lot of brokers are highly skilled in residential advice, but haven't built the confidence or the process to manage more complex funding types. You don’t know what you don’t know, and without proper sourcing systems, it’s harder to break into that market."  

He points to growing support across networks and AR firms, alongside improving sourcing systems for specialist finance. "There is more upskilling being offered now, and that’s helping to close the gap." 

Refurbishment and conversion drive opportunity 

When asked about high-growth segments, Cotterell points to refurbishment and conversion projects, particularly those making use of permitted development rights. 

"There’s significant opportunity in projects converting underused offices to residential. That’s providing a lot of margin for developers and advisors alike," he said. "But it’s not about jumping straight into big PBSA schemes. Brokers need to take smaller steps and really understand each part of the process."  

This gradual entry into specialist finance helps ensure advisors can serve clients properly, and avoid costly missteps.  

Bridging & commercial in 2025: key stats  

• £2.8 billion – Bridging completions in Q1 2025, matching the record set in late 2024 (BDLA)  

• £18.34 billion – New bridging loan applications in Q1 2025, up 55.3% from Q4 2024 (BDLA)  

• £209.4 million – Gross lending by MT Finance contributors in Q3 2025, highest quarterly total since Q3 2024  

• 20% – Share of bridging loans used for investment property purchases in Q3 2025 (up from 16% in Q2)  

• 41 days – Average completion time for bridging in Q3 2025, down from 48 days (MT Finance)  

• 114,961 homes – Created via commercial-to-residential conversions (change-of-use) in the last five years (Landlord Knowledge, 2025)  

Training needed to support specialist expansion  

Cotterell acknowledges some brokers still view bridging and commercial as too specialist, but said that perception is changing fast.  

"Clients want holistic advice. They want to partner with a firm that can handle everything - from the residential mortgage to the next development," he said. "The more straightforward cases are the ones that may eventually be replaced by automation or AI. The complex ones are where brokers still add serious value."  

But with complexity comes risk. "You need robust due diligence and clear exit strategies. Strong lender relationships, legal teams, valuers - it’s about having the right frameworks in place," he adds.  

He advocates for more structured qualifications and sign-off procedures: "It’s a specialist area. People can make mistakes. Firms need to make sure the knowledge is there before advisors are let loose in this market."  

As demand for yield and development grows, so too does the pressure on brokers to adapt. For those willing to invest in upskilling, bridging and commercial finance may prove not just viable, but vital.

This article is part of our Monthly Spotlight series, which in January focuses on bridging finance. Full coverage can be found here.