When burglars Wendy and Craig Johnston decided it was time to downsize, they had to move quickly. They stumbled upon a four-bedroom bungalow near Dunfermline, Fife—a rare find, as such homes don’t often hit the market. Their main concern was that if they delayed selling their own house, they’d miss out, so they chose to secure the bungalow first, which meant turning to a bridging loan.
“There were definitely moments when I felt overwhelmed and questioned whether I should have sold my house first,” reflects Wendy, who is 56. “But I really believe it was crucial to find the right place. I’m happy now.” She adds, “We didn’t have to rush and settle for something less, forced by time, and face another move in a few years.”
The Johnston family was concerned about potential complications in securing their new bungalow due to the housing chain. They’re not alone in feeling this way; more home buyers are leaning towards short-term bridging loans, typically lasting about a year. These loans help bridge the financial gap between purchasing a new home and selling the old one.
According to data from the Financial Conduct Authority, the use of bridging loans surged by 108% between 2020 and 2024. Peter Williams, the CEO of a property finance comparison site, noted that in today’s slower market, these loans are becoming increasingly common for urgent home purchases. “I spoke with two customers today; one hasn’t sold his home yet, and the other lost a buyer. Without a bridging loan, he risks losing the house he wants,” he explained.
The Johnstons secured a £450,000 loan at a relatively high interest rate of 10 percent, which needs to be paid back within a year after selling their previous home. Naturally, they aim to sell as fast as possible to minimize interest payments, which also included a £9,000 arrangement fee.
The Bridge Development Finance Association has pointed out that 2025 saw record lending, climbing from £10 billion to £13 billion in one year. Together, the lender utilized by the Johnstons, reported that in 2025, 63% of bridging loans were aimed at facilitating chain-free purchases.
The chain of events posed a threat to the Johnston family’s contract at various stages. The widow selling the bungalow risked losing her next property due to her buyer being in a chain. Ultimately, she opted to accept the Johnstons’ offer instead. Their bridging loan essentially placed them in a cash buyer’s position, allowing them to agree on her preferred closing date by late August.
Timing proved critical for the Johnstons when purchasing with a bridging loan. They had found a buyer for their own four-bedroom home, which also included a two-bedroom annex for Wendy’s parents. However, complications arose with two potential buyers, both of whom faced hurdles in their own sales. With ten weeks passing and no progress, they had to relist their house. Each failed sale increased their loan interest. Fortunately, they soon found a cash buyer and secured a legally binding agreement.
Meanwhile, they were busy renovating their new bungalow. The uncertainty lingered. “Every day we held it, the more it cost,” Craig, 59, stated. The Johnstons believe they made a sound financial decision—they paid the asking price of £400,000 for the bungalow and think waiting to sell first could have cost them an extra £40,000, roughly the same amount as their bridging loan.
To secure their loan, the lender evaluated the value of both properties—selling at £550,000 and buying at £400,000. Scott Clay from Together remarked, “We only lend to those we trust will repay us. For 90% of our bridging loans, the exit strategy is to sell their home.”
Bridging Loan: Pros and Cons
Using a bridging loan usually requires going through an intermediary. While regulated for home purchases, they lack similar protections for sale transactions. Craig adds, “It’s worth noting that there are lenders without penalty clauses for paying back the loan sooner than a year. Others might impose penalties.”
Clearly, the advantages of bridging loans include speed and certainty. However, the downsides include high interest rates, arrangement fees (often around 2% of the loan), and the risk of foreclosure if the home isn’t sold on time.
Wendy often thought about possible worst-case scenarios. “At one point, I feared that if my home didn’t sell, I might have to let go of my new one because I couldn’t bear the cost of a bridging loan for a whole year,” she shared.
Craig is a bit hesitant when it comes to recommending bridging loans for everyone. “It might have worked out for us, but if we had waited another few months to sell, we would have lost another £15,000. It would have been unfeasible,” he cautions. “It’s definitely high risk.”
