The UK bridging and development finance market slowed in the first quarter of 2026, with completions falling 28% to £1.8 billion and applications dropping 15% to £9.9 billion, according to the latest figures from the Bridging & Development Lenders Association (BDLA).
Lender loan books stood at £11.5 billion at the end of March. Average loan-to-value (LTV) ratios also fell, from 58.64% in Q4 2025 to 56.64% in Q1 2026, as lenders continued to take a cautious approach to risk.
The BDLA said the slowdown follows a long period of growth and comes against a backdrop of economic and geopolitical uncertainty. However, it said the sector remains supported by strong demand, disciplined underwriting and continued confidence from lenders and investors.
Development lending reached £276.5 million during the quarter, down 34% from £420.3 million in Q4 2025. Second charge lending fell 10% to £131.3 million from £145.8 million in the previous quarter.
The BDLA’s quarterly survey is compiled by independent auditors using data submitted by lender members. It provides one of the most detailed snapshots of activity in the UK bridging and development finance market.
BDLA chief executive Adam Tyler 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.”
