Bridging and commercial markets: Optimism for 2025

Supported by data from UK Finance, the Bridging and Development Lenders Association (BDLA), and Bridging Trends, brokers should feel confident in capitalising on this flourishing sector.

Let’s explore why the outlook is so positive.

Competitive market driving better consumer outcomes

The bridging and commercial finance markets have never been more competitive. With over 150 active lenders believed to now participate in the bridging sector alone, options for brokers and their clients have increased significantly in recent years.

This heightened competition has created an environment of fair pricing, low fees, and innovative product offerings, all of which very positively affect consumer outcome.

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According to Bridging Trends, bridging loan interest rates have dropped considerably over the past decade, reflecting the sector’s competitiveness. For brokers, this means an excellent opportunity to secure great deals for clients needing fast access to funding for projects such as property acquisitions, refurbishments, and auction purchases.

Additionally, UK Finance highlights renewed interest in the commercial property market as retail and office spaces are repurposed into residential dwellings – a trend accelerated by changes in working patterns and urban regeneration efforts. These dynamics present fresh opportunities for brokers to match clients with tailored financing solutions.

Why property remains a resilient asset class

Despite economic fluctuations, property remains one of the most reliable asset classes for generating both short- and long-term returns. For entrepreneurs, residential landlords, and self-employed professionals, property investment continues to be a cornerstone of wealth creation. With rental yields staying strong and property values in key regions experiencing steady growth, clients are well-positioned to profit from property-related ventures.

Moving into a new year, I strongly believe brokers must proactively engage and spur their clients into action – particularly self-employed professionals, residential landlords, and other entrepreneurial individuals – who may not yet be aware of opportunities in bridging and commercial finance.

Presenting compelling case studies and tailored financial solutions can certainly help clients seize these opportunities before they pass.

The evolving landscape of bridging loans

The profile of bridging loan applicants has evolved significantly. While professional investors and entrepreneurs have traditionally dominated the space, mainstream profile individuals are increasingly using bridging loans to position themselves as cash buyers in competitive purchase markets.

Indeed, Bridging Trends data shows that top-quality applicants are contributing to rising transaction sizes and a greater focus on higher-value properties.

Ongoing opportunities remain in auction financing, while chain-break purchase scenarios present regulated bridging solutions, which are best positioned to provide excellent solutions. Beyond these established use cases, growth potential also exists in social housing, refurbishment projects as landlords prepare properties to meet stricter energy-efficiency requirements and, separately, as retail and commercial units are repurposed into residential dwellings.

How brokers can seize the opportunity

To make the most of this optimistic outlook, brokers must act with purpose and urgency. Key steps include:

1. Educate clients: Proactively engage clients who may benefit from bridging or commercial finance. Highlight competitive rates, fast funding times, and real-life case studies.
2. Build expertise: Stay informed about the latest trends, lender offerings, and regulatory changes. This knowledge enables brokers to provide the best possible advice and solutions.
3. Focus on niche opportunities: Explore specific market niches, such as refurbishment loans for landlords or funding for retail-to-residential conversions. Tailored solutions can help clients unlock value and stay ahead of the competition.
4. Collaborate with experts: Partner with distribution and/or lender experts who share a commitment to delivering value and excellent service. Many will support brokers with marketing materials, training, and joint calling with clients.

Looking ahead

As 2025 approaches, the bridging and commercial finance markets offer brokers a wealth of opportunities to grow their businesses and deliver exceptional value to clients. With a competitive lending environment, strong property market fundamentals, and a diverse range of client needs to address, brokers who take proactive steps now will be well-positioned for future success. Let’s ensure this optimism translates into tangible results for clients and brokers alike.