UK bridging and development finance activity moderated in the first quarter of 2026, although the BDLA said the sector remains well positioned with strong fundamentals and continued demand for flexible funding.
The UK bridging and development finance market entered a more measured phase during the first quarter of 2026, with completions, applications and development lending all declining compared with the final quarter of 2025, according to the latest data from the Bridging & Development Lenders Association (BDLA).
The figures showed completions totalled £1.8bn in the three months to 31st March 2026, down from £2.5bn in the previous quarter. Applications fell from £11.7bn to £9.9bn, while total lender loan books stood at £11.5bn. Average loan-to-value ratios also reduced to 56.64%, compared with 58.64% in Q4 2025, reflecting a continued focus on prudent lending and risk management.
Development lending reached £276.5m during the quarter, down from £420.3m in the final quarter of 2025, while second charge lending fell to £131.3m from £145.8m. Despite the slowdown, the BDLA said the figures should be viewed in the context of the market’s substantial growth in recent years and the wider economic and geopolitical uncertainty affecting the property finance sector.
Adam Tyler, chief executive of the BDLA, said: “After a sustained period of strong growth, it is not surprising to see the market move into a more measured phase. The first quarter of 2026 has been shaped by a number of wider economic and global factors, and these have inevitably influenced confidence and activity across the property and mortgage sectors.
“However, the bridging and development finance sector remains in good shape, with strong foundations, experienced lenders and a clear role to play in supporting borrowers who need flexible, time-sensitive funding solutions.
“Across the wider mortgage market, the last 12 months have been challenging. Brokers, lenders and borrowers have all had to navigate uncertainty around rates, property values, transaction volumes and the broader economic outlook. In that context, some cooling in activity was expected.
“What gives us confidence is the continued professionalism of the sector. Lenders are being disciplined in their underwriting, capital remains available for high-quality lending platforms, and there’s a growing focus on governance, transparency and sustainable growth.
“The market is also becoming more mature. That means growth will not always be linear, but the long-term direction of travel remains positive. Bridging and development finance is now an established and essential part of the UK property finance landscape, the BDLA will continue to support the standards, data and representation needed to ensure the sector grows responsibly, and BDLA membership continues to provide a badge of quality for others to follow.”