Tight margins and cautious lenders are reshaping bridging and development finance. Here's how brokers are adapting
As costs rise and lender scrutiny tightens, bridging and development brokers are adjusting strategies - internally and externally - to maintain deal flow and client trust.
“Bridging is just a little bit more dynamic,” said Luke Egan, director of bridging and development at Truffle Specialist Finance. “Keeps you guessing. You don’t find very many similar deals.”
Egan, who’s worked in finance for nearly 20 years, launched the bridging and commercial arm of his firm four years ago. He said recent market pressures have pushed his team to double down on structure and supervision.
Scaling with structure, not shortcuts
“We’ve had to really look at the way we were doing it,” said Egan, referring to how the firm responded to increased activity over 2023–24. “We put a lot more robust practises in place.”
New advisors now undergo detailed induction, supported by 100% supervision and additional compliance oversight. “We just make sure everything is more systemized, more visible,” he said. “So everyone knows where they are.”
Growth, he adds, cannot come at the cost of good governance. “If you compromise that, the worst could happen,” he said. “So it’s just not worth doing.”
Development finance demands contingency
Egan identifies contingency as the central issue in today’s cost environment. “Making sure that clients have got a realistic contingency built into their bill costs,” he said. “With some lenders, it’s not even a consideration. With others, it’s a huge one.”
He also encourages clients to provide deeper planning documentation. “Every development should come with an executive summary - the whys and wherefores, not just the build schedule,” he said. “It helps to get into the vision of the developer... and you can see the research that has gone into this.”
“It’s got to be a basis for numbers,” he said. “Not back-of-a-fag-packet stuff.”
Be upfront - or risk losing the client’s trust
Since COVID, development finance has been slower to rebound than bridging, according to Egan. “It is more difficult. It is more complicated, and the price will not be what you think.”
That makes early client conversations critical. “Being forewarned is forearmed,” he said. “Just making sure we’re all on the same page and saying, ‘We can still do this for you - we just want to make sure you’re clear on exactly what’s involved.’”
He acknowledges some brokers still promise quick completions to win deals. “You’ll always get the person that when a deal comes down said, ‘but this guy’s told me he can do it in a week.’”
“When a week comes, you’re not going to change broker,” he said. “People do it to secure business. It’s the transactional nature of the business.”
Valuation delays are compounding pressure
Looking to 2026, Egan sees rising valuation costs as a major friction point. “Only yesterday we were quoted £1,500 for a retype of a valuation - literally changing the address and adding an executive summary.”
He recently completed a development deal where valuation and monitoring alone added nearly £10,000 in extra fees. “The valuation was, I think, £2,500. The monitoring to date initially was £1,200 and they asked for £600 or £700 per visit,” he recalls.
Timelines are also under strain. “The timescale for the report was 15 working days,” he said. “They still went over - they were two days shy of a month to write a report on a property they’d already been to.”
To reduce delays, he’s prioritising automated and desktop valuations wherever possible. “If lenders don’t start offering AVMs or desktop valuations, I think they’ll be left behind,” he said.
Rate relief is uneven across lenders
Following the Bank of England’s May rate cut, some lenders responded quickly, while others have held steady. “One or two of them have been pretty low and very consistent with low rates for a while,” Egan said. “You can’t really drop it anymore.”
Others have passed on the cut. “The trend certainly seems to be down rather than up - which is good,” he said.
That said, development finance hasn’t seen the same movement. “It’s coming. It’s just a little bit of a slow burn,” said Egan. “It all depends how they’re funded... the base rate might make no difference to them immediately.”
