When Brexit finally happened, plenty of people in the finance world were bracing for all sorts of changes. Some were quick and obvious, and others have crept in over time. If you’re looking at unregulated bridging finance in London, chances are you’ve noticed a shift, too. The game’s rules have changed slightly, and while bridging finance is still alive and well, there are a few new realities to be aware of.
First off, let’s be clear about what unregulated bridging finance is. It’s a short-term loan used to “bridge” a gap – usually when buying a property – that isn’t regulated by the Financial Conduct Authority. Most of the time, it’s used for business purposes or investment properties. Because it’s not tied up in the same red tape as regulated loans, it tends to be quicker and more flexible. But with that flexibility comes a bit more risk – and Brexit has only added to that unpredictability.
Confidence and risk appetite have taken a knock
Before Brexit, London was seen as a safe haven for property investment. The market was strong, the pound was stable, and the finance sector was ticking nicely. But when the UK left the EU, much of that confidence took a hit. Investors, especially from overseas, became more cautious, and lenders became more selective, too.
What this means in practice is that some unregulated bridging lenders have either tightened their criteria or pulled back slightly from the market. There’s still funding out there, but you might need a stronger case to secure it. Lenders want to see realistic exit strategies, solid security, and experienced borrowers. So, if you’re a first-timer hoping for fast cash with no questions asked, it’s not quite as easy as it once was.
The regulatory landscape is shifting
Even though we’re talking about unregulated loans, that doesn’t mean there’s no oversight. Since Brexit, the UK has started diverging from EU rules in certain areas, including financial services. While we’ve not seen sweeping new laws hit the bridging market yet, there’s a general sense that change could be on the horizon.
There’s talk of more transparency, tighter lending standards, and possibly even new reporting requirements in the future. None of that is confirmed, but the uncertainty has made some lenders more cautious. The last thing they want is to get caught out by new rules they didn’t see coming.
Currency movements are making deals more complex
Another side effect of Brexit has been the fluctuations in the pound. The exchange rate has become a key consideration for investors in euros or dollars. One day, your investment looks like a bargain; the next, it feels overpriced. And that’s had a knock-on effect on how and when people use bridging finance.
Some lenders who used to deal heavily with foreign clients have noticed a drop-off in demand. Others have started offering more tailored services to attract international business again. But overall, the uncertainty around currency has made people more cautious, especially if their project relies on tight margins.
The opportunities are still there
It’s not all doom and gloom, though. In fact, for some borrowers, Brexit has opened up new opportunities. Property prices in certain parts of London dipped slightly after the vote, and some savvy investors used bridging loans to snap up bargains. With fewer competitors, finding the right deal is sometimes easier if you’ve got your ducks in a row.
Lenders who’ve stayed in the game are often more experienced and focused. They understand the risks and how to structure deals that work for everyone involved. If you’re prepared, honest, and clear about your goals, there’s still plenty of room to manoeuvre.
What to keep in mind going forward
If you’re considering using unregulated bridging finance in London post-Brexit, the main thing to do is do your homework. The landscape has changed, but that doesn’t mean it’s closed off. It just means you need to be more aware of what lenders are looking for – and what risks you might face.
Work with brokers or advisers who understand the current market. Be upfront with your plans and ensure a clear, realistic exit. Always read the fine print. The more prepared you are, the smoother the process will be.
Brexit may have added a few hurdles, but it hasn’t shut the door. The bridging finance market in London is still very much alive – it just looks a little different now. As long as you’re willing to adapt, deals still need to be done.
