Not all bridging finance is regulated by the Financial Conduct Authority. Which category a loan falls into is not a matter of preference — it follows from the property, how it is occupied and why you are borrowing.
Why the distinction matters
The category determines the rules a lender and broker must follow, and the protections available to you if something goes wrong. It is worth understanding before you commit, not afterwards.
When bridging is generally regulated
Bridging finance is usually regulated where the loan is secured against a property that you — or in some cases an immediate family member — occupy or intend to occupy as a home. Buying a home before your existing one has sold is a common example.
When bridging is generally not regulated
Borrowing for a business or investment purpose is typically outside the regulated regime. Common examples include finance secured on a buy-to-let property, commercial premises, land, or a property bought purely to refurbish and sell.
It follows the facts, not the label
The classification depends on the substance of the transaction rather than what it is called. A property’s intended use, who will live in it and the purpose of the borrowing all feed into it, and one loan can look similar to another while falling on a different side of the line.
What changes in practice
Where a loan is regulated, specific conduct rules apply to how it is sold and administered, and you would generally have access to the Financial Ombudsman Service if you needed to complain. Those protections do not apply in the same way to unregulated lending.
Morrow will explain which category applies to your circumstances, and what it means, before you proceed.
Some bridging finance is not regulated by the Financial Conduct Authority. Your property may be repossessed if you do not keep up repayments on a loan secured against it.
