Bridging is booming into 2026 – powered by creative investors, rebridging deals and auction opportunists, even as prime buyers hit pause
Bridging finance is heading into 2026 with a curious mix of optimism and realism. On the one hand, brokers report rising confidence and a strong pipeline of opportunity, particularly in rebridging and development exits. On the other, the Autumn Budget and wider tax environment have cast a long shadow over the high‑end market, slowing prime transactions and altering how wealthier clients use short‑term funding.
Against this backdrop, SPF Short Term Finance key relationship director Laura Toke sees a sector that is evolving fast – driven by more creative investment strategies, longer sales timelines and an increasingly pronounced divide between prime London and the rest of the UK.
From buy‑to‑let to “make and create”
For Toke, the biggest structural shift is in how investors are trying to make money from property.
“We see bridging going from strength to strength as more people try to make money from property in more creative ways than just buy, hold and let – i.e. refurbishment and development,” she says.
That creativity is showing up in two clear ways.
First, more investors are moving beyond traditional buy‑to‑let into value‑add plays: refurbishments, conversions and small‑scale schemes where they can manufacture capital growth rather than wait for it. These projects often require speed, flexible underwriting and a willingness to fund properties in less‑than‑perfect condition – a natural fit for short‑term lenders.
Second, strategy is shifting among seasoned developers. Toke notes that many who previously focused almost exclusively on mainstream residential schemes are now venturing into more specialist sectors, including supported living, assisted care and HMOs. These sectors tend to be operationally more complex, but they can offer better yields and longer‑term income security – again supporting demand for tailored bridging and development exit solutions.
This evolution is not confined to London. While the capital remains a core market, investor appetite for higher‑yielding, value‑add strategies outside the M25 is supporting bridging volumes in the regions, especially where pricing is keener and planning or refurbishment opportunities are easier to access.
Rebridging: opportunity with a warning label
Rebridging is widely seen by intermediaries as the standout growth area for 2026 – and Toke’s front‑line experience bears that out.
“One in nine of the deals we tend to see are re‑bridges,” she says. “This is already a meaningful share of the market, and we expect a slight increase as we move into 2026.”
The main driver is not speculative behaviour but a tougher sales environment. Borrowers who completed bridges in early 2024 were not pricing in the impact of the most recent Budget or the subsequent slowdown at the higher end of the market. Longer marketing periods, softened values and more cautious buyers mean some exits are taking significantly longer to materialise.
“As a result, more clients may require additional time to exit,” Toke explains.
For brokers and lenders, that creates both an opportunity and a responsibility. Rebridging can be a valuable tool to rescue viable projects and avoid distressed sales, but it can also mask a fundamentally weak exit if not handled carefully.
“For brokers and lenders, the key is transparency,” Toke stresses. That starts with setting realistic expectations on sales timeframes from day one, and rigorously stress‑testing the credibility of a client’s exit strategy rather than relying on best‑case assumptions.
Where sale of property remains the intended route, Toke argues that having a Plan B – typically refinance onto a term product – is essential, even if it won’t always be achievable in practice. Clear communication around these contingencies, and around the costs and risks of extending short‑term borrowing, will be critical if rebridging is to be a sustainable growth driver rather than a source of future arrears.
Budget fallout at the top end: prime buyers step back, short‑term users step in
If the broader bridging market is optimistic, the same cannot be said for the high‑value and prime sectors, where policy shifts have landed hardest.
“It has put a real dampener on the high‑end market as more costs to bear affect the end user’s decision‑making,” says Toke of the recent Budget and its interaction with previous tax changes.
Additional tax burdens and continued policy uncertainty have weighed heavily on wealthy buyers’ appetite to transact. Many high‑net‑worth individuals were already reconsidering their UK tax residency; the latest measures have accelerated that thinking, with some choosing to pause or divert investment elsewhere.
On the ground, Toke is seeing a clear pattern: prime values softening, transaction volumes slowing and a growing cohort of affluent would‑be buyers opting to rent rather than purchase until there is greater clarity and price stability. This is particularly evident in the £3m‑plus bracket, where sentiment is often the decisive factor.
The short‑term impact for bridging is nuanced. Reduced acquisition activity at the very top end means fewer large‑ticket purchase bridges. At the same time, developers and investors operating in the prime space are increasingly turning to short‑term finance to buy themselves time – whether to re‑price, re‑position schemes, or pivot towards different buyer profiles and tenures.
“The shift is leading to reduced acquisition activity in the £3m‑plus bracket and a corresponding uptick in short‑term enquiries from developers and investors who are adjusting their strategies,” Toke notes.
Development exits up, homeowner bridging down, auctions ascend
Beyond rebridging and prime dynamics, Toke is seeing sharp changes in product‑level demand.
“Owing to slowing sales pace, we have done 50 per cent more development exits this year than last,” she says. Slower sales rates are tying up capital for longer and leaving developers exposed to more expensive development finance facilities. Development exit loans are being used to release equity, improve cash flow and de‑risk schemes, even where projects are broadly performing to plan.
In contrast, regulated residential homeowner bridging has moved the other way, with SPF seeing around 30 per cent fewer enquiries compared with the same point last year. For many owner‑occupiers, higher borrowing costs, affordability constraints and general macro uncertainty are dulling appetite for short‑term solutions, particularly where they are discretionary rather than essential.
One of the standout growth stories, however, is auction finance. Toke reports a “large uptick” in demand as auctions continue to gain traction for both residential and commercial assets. For time‑sensitive buyers looking to move quickly on competitively priced stock – especially in secondary or value‑add locations – bridging is the obvious facilitator.
What it means for brokers and lenders in 2026
Pulling these threads together, the picture that emerges for 2026 is of a bridging market that is:
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Buoyant in aggregate, buoyed by investors’ shift towards refurbishment, conversion and specialist sectors;
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Increasingly reliant on rebridging and development exit as borrowers take longer to sell and refinance;
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Uneven across price points, with prime London and the £3m‑plus bracket particularly exposed to tax and policy risk;
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Seeing strong growth in auction‑led transactions, but weaker demand from mainstream regulated homeowners.
For intermediaries, the task will be to lean into the opportunities while tightening discipline around exits and client suitability. That means more forensic up‑front due diligence, honest conversations about timelines and downside scenarios, and a renewed focus on contingency planning where exits depend on sale in a still‑fragile market.
For lenders, it may require re‑examining risk models around rebridging and development exits, especially in segments most affected by Budget‑driven behavioural shifts. Sensible leverage, realistic valuations and robust monitoring will be key as the market adjusts.
If those safeguards are in place, 2026 could prove to be a year in which bridging cements its role not just as a niche problem‑solver, but as a mainstream tool for investors and developers reshaping their strategies in a more complex, tax‑sensitive and opportunity‑driven property landscape.
