The growing use of bridging finance to prevent residential collapses

There has been a significant increase in bridging market activity driven by homebuyers and sellers looking to avoid a chain-break, as collapsed property transactions cost an estimated £275.5 million during the first quarter of 2025 alone, according to new analysis by West One Loans, a leading provider of property finance and specialist mortgages.

 

West One Loans analysed the latest data from TwentyCI on the estimated volume of fall-throughs seen during Q1, the average cost of a fall-through to those involved and the estimated total cost to the market over the first three months of the year.

 

The data shows 78,855 failed transactions occurred across the UK property market in Q1, with each costing an average of £3,493.

 

This equates to a total quarterly loss of £275.5 million, reflecting the scale of disruption and financial inconvenience that fall-throughs continue to cause. It also marks a quarterly rise of 11.6 per cent in the number of fall-throughs versus Q4 2024, and an even steeper annual increase of 23.5 per cent.

 

At the same time, the average cost of a fall-through has climbed to £3,493, resulting in a 13.2 per cent increase in total market losses quarter-on-quarter and a 27.9 per cent rise compared with Q1 2024.

 

This escalation is largely attributed to increased market activity as confidence has returned, though the uncertainty surrounding the 31 March stamp duty deadline also likely contributed to transaction volatility.

 

To help mitigate the risk of fall-throughs, West One Loans has seen a notable increase in homeowners turning to bridging finance as a safety net. According to the latest bridging trends data, chain breaks have consistently ranked as the first or second most common reason for taking out a bridging loan over the past four quarters, closely followed by property investment purposes.

 

“While bridging finance has long been viewed as a specialist tool for more niche segments of the market such as property investors and auction buyers, we’re seeing a clear shift in how it’s being used,” said Thomas Cantor, Co-Head of Short-Term Finance at West One Loans. “While it has always played a part within residential transactions, we’re seeing a growing number of homebuyers and sellers now turning to bridging to salvage their purchase or sale when a chain breaks down.

 

“Bridging is no longer seen as a niche finance option and, as a result of this demand, we’ve introduced limited edition rates for this more vanilla flavour of regulated lending in order to further capture this segment of the market.”

 

In today’s competitive market, speed and certainty are paramount – and this is where bridging really comes into its own. This, in turn, has led to it being increasingly seen as a mainstream solution to help prevent a deal from collapsing.

 

Data tables and sources

 

Estimated number of fall-throughs sourced from TwentyCI (Q1 - latest available at time of ressearch).

Estimated average cost of fall through based on source value and estimated according to inflation increases and legal fee increases and in line with the latest house price data.

Total estimated cost based on the volume multiplied by the average cost.
View the full data tables and sources online here. 

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www.westoneloans.co.uk/blog/growing-use-of-bridging-finance-to-prevent-collapse