The Cut
Stephen Todd
CCO and co-founder of VAS Given the relatively small size of this decrease, we’d opt rather to focus on the fact that bridging is being used for almost half of all BTL purchases—more than for any other property type. It is fuelling this market, especially where below market value and value-add opportunities are concerned. Investors are using bridging as a viable tool to grow and diversify their portfolios, especially where they need to act fast and improve the value before moving onto longer-term debt. It aligns with the market being creative and entrepreneurial in its approach and using bridging to achieve this.
Natalie Anderson
Mortgage and protection adviser at Connect Mortgages The decline has been caused mainly by a shift in market conditions and investors’ behaviour. For example, higher interest rates have increased borrowing costs and thus reduced profitability. Tighter lending criteria have meant stricter affordability tests, making financing harder. Also, lower rental yields have led to softer house prices, and rising costs have squeezed returns. This includes higher taxes and stricter rental rules, which added pressure. Demand may recover if rates fall and rental yields improve.
Donna Francis
Managing director at Envelop This decline reflects higher borrowing costs and stricter affordability assessments, which have made refinancing significantly more difficult— especially for those with smaller portfolios. Regulatory changes, including higher stamp duty, potentially stricter EPC requirements and tax adjustments, have reduced profitability, prompting many landlords to exit or scale back investments. Market uncertainty and softening property prices have further discouraged direct BTL acquisitions. Instead, bridging finance is increasingly being used for refurbishments, conversions and semi-commercial developments—where value-add opportunities offer better financial viability. The PRS is certainly becoming more professionalised, with institutional investors driving market shifts and portfolio landlords exploring alternative financing strategies. This is where the intermediary market should be focusing its attention in 2025.
Bridging & Commercial
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