Second Charge Bridging Went From 9% to 22% in One Quarter

Most quarterly market reports tell you what you already suspected. The Bridging Trends figures for Q2 2026, published on 25 August, contain one number that should genuinely change how you think about your next deal.

Second charge bridging went from 9% of contributor lending in Q1 to 22% in Q2. It more than doubled in three months.

That is not a rounding error or a seasonal wobble. It is a large, fast shift in how borrowers are raising short-term money, and it points at something specific: people are borrowing against equity they already have rather than refinancing the whole structure to get at it.

The headline numbers

Gross lending among contributors fell 15%, from £199.2m in Q1 to £173.1m in Q2. Read on its own, that looks like a market going quiet. Read alongside the rest of the release, it looks more like a market changing shape.

• Regulated bridging rose from 41% to 48% of lending, the largest quarterly rise since Q1 2022.
• Chain break finance rose from 14% to 18%, and is now the single largest stated purpose.
• Heavy refurbishment rose from 6% to 10%.
• Business injections doubled, from 4% to 9%.
• Average completion time fell to 46 days, down from 53 in Q1.
• Average monthly rate edged down to 0.81%, from 0.82%.
• Average term held at 12 months.

Wesley Davidson, quoted in the release, put the regulated rise down to borrowers turning to bridging "out of necessity due to slower sales." Raphael Benggio's read was more positive: "borrowers have just adapted and it is extremely encouraging."

Both are describing the same thing from different ends. Sales are slow, so people bridge.

Why chain break and second charge moved together

Chain break at 18% and second charge at 22% are the same story told twice.

A slow residential market breaks chains. When the buyer below you cannot sell, you either lose the purchase or you fund it yourself for a few months. That is a regulated bridge, which is why the regulated share jumped in the same quarter.

Second charge is what happens when the borrower already has cheap debt they do not want to disturb. If you are sitting on a term loan fixed before the recent repricing, paying an early repayment charge and refinancing the whole balance onto today's rates to release £300,000 is an expensive way to raise £300,000. A second charge bridge sits behind the existing loan, takes the equity, and leaves the cheap money alone.

That logic has always existed. What changed is that the gap between old fixed rates and new ones got wide enough to make it the obvious answer rather than a clever one. Average two-year fixed rates have risen from 4.85% in February to 5.63% in August. Disturbing a loan written earlier this year now has a real, quantifiable cost.

Lenders noticed. United Trust Bank reintroduced 90% LTV second charge lending and cut rates by 60bps on 3 August, which is not the behaviour of a lender expecting the segment to shrink.

The number nobody is talking about: 46 days

Completion times fell from 53 days to 46. That is a week, and a week is the difference between hitting a deadline and explaining why you missed it.

It matters more than usual right now because there is a fixed date on the calendar. The Autumn Budget lands on Wednesday 28 October. Whatever it contains, deals that need to be done under current rules need to complete before it.

Work backwards from 28 October at 46 days and you land in mid-September. A bridge started after that is, on average, a post-Budget completion. Averages are not promises, and a clean deal with a responsive solicitor and an existing valuation can move a great deal faster. But if you are planning around "we will look at it in October," the arithmetic says you are planning a November deal.

What falling volume alongside faster completions actually means

A 15% drop in gross lending with a 13% drop in completion time is an unusual combination. Lenders that are busy get slower, not faster. Lenders with capacity and fewer applications compete on the thing borrowers complain about most, which is speed.

That is the practical read for a borrower this quarter. There is capacity in the market, service levels are better than they were in the spring, and pricing has stopped drifting upward at 0.81% a month. The constraint on your deal is more likely to be your own paperwork than the lender's appetite.

Which is a good argument for having the documents a lender will ask for ready before you apply rather than after.

What this means if you are holding an asset

Three things follow from this data, and they apply whether you are a developer, a landlord or a trading business with property on the balance sheet.

Do not refinance the whole thing to raise part of it. If your existing term debt was written before February, it is probably cheaper than anything you can replace it with. Price a second charge bridge against a full refinance before you assume the refinance is simpler. The market has already worked this out, which is what the 9% to 22% move represents.

Speed is available, so use it as leverage. A 46-day average means a well-prepared deal can genuinely be quick. That is worth something in a negotiation with a motivated seller, and it is worth more before a Budget than after one.

Slow sales are a funding problem with a funding answer. Chain break at 18% and business injections at 9% both describe people who could not wait for a sale to complete. If your plan depends on a disposal landing on time, it is worth knowing now what the bridge behind it would cost, rather than finding out in the week you need it. Our guide to bridging loan exit strategy covers how lenders test that, and rebridging covers what happens when the first exit does not arrive.

The honest caveat

Bridging Trends is contributor data, not the whole market. It reflects the lending of the packagers and brokers who submit to it, and £173.1m is a fraction of total UK bridging. Directional, not definitive.

But the direction here is consistent with everything else we have watched this month: regulated bridging concentrating at the top end, lenders reopening criteria they had closed, and funding lines being extended rather than withdrawn. A market with capacity, competing on service, while the term debt behind it gets more expensive.

Got a deal that needs to complete before the Budget, or an existing facility you would rather not disturb? Talk to The Finance Brokers. We will tell you honestly whether a second charge, a full refinance or waiting is the cheaper answer.