Facebook Summary: The FCA is finally reviewing the strict 12-month limit on bridging loans, and it’s great news for property owners! From more flexible timelines to fairer treatment during delays, here are 5 ways these changes make your next move easier. If you’re planning a project in 2026, this is a must-read.
If you’ve ever been stuck in a property chain that just won’t move, or you’ve found your dream home before selling your current one, you probably know about bridging loans. They are the "safety net" of the mortgage world, quick, short-term finance designed to bridge a gap.
But for a long time, there has been a bit of a hurdle: the 12-month rule. For regulated bridging loans (the ones secured against your own home), lenders have traditionally been capped by a 12-month term limit.
As we move through 2026, the Financial Conduct Authority (FCA) has stepped in to review this. They’ve realised that the world has changed. Whether it’s solicitors taking longer to process paperwork in Oldham or material shortages delaying a renovation in Manchester, 12 months just isn’t always enough anymore.
I’m Naz Islam, and at Hunter Capital, we see these challenges every day. Let’s break down exactly what the FCA’s new term limit review means for you and your property plans.
What Exactly is a Bridging Loan?
Before we dive into the changes, let’s keep it simple. A bridging loan is a short-term loan used until a person or company secures permanent financing or removes an existing obligation. It allows the user to meet current obligations by providing immediate cash flow.
You might use one if:
- You’re buying at auction and need to complete in 28 days.
- You’ve found a new house but haven't sold your old one yet.
- You’re a landlord doing a "light refurb" on a buy-to-let property.
- You’re dealing with a probate property that needs work before it can be sold.
For more details on how these work, check out our guide to bridging finance.
1. More "Breathing Room" for Your Property Projects
The biggest takeaway from the FCA’s review is the potential for longer loan terms. Historically, the 12-month cap on regulated bridging was designed to protect consumers from staying in expensive debt for too long.
However, the FCA has now acknowledged that this "one-size-fits-all" approach can actually cause more harm. If your project takes 13 months but your loan expires at 12, you face "default" rates, heavy extension fees, or the pressure of a forced sale.
What it means for you: In 2026, we expect to see more lenders offering 18-month or even 24-month regulated bridging terms. This gives you the peace of mind to finish your renovations or find the right buyer for your house without a ticking clock constantly hanging over your head.
2. Recognition of "Real World" Delays
The FCA's review isn't just about numbers; it’s about reality. They’ve looked at the data and seen that material shortages, planning permission backlog, and "broken chains" are no longer rare, they are the norm.
If you’re building an extension or modernising a home in Oldham, you know that finding a reliable contractor can take time. If the council is slow on a planning application, that’s not your fault, yet under the old rules, you’d be the one paying the price when your bridging loan term ended.
What it means for you: The new guidelines encourage lenders to be more flexible when delays are outside of your control. Instead of being penalised, you’ll likely find it easier to get a "planned extension" to your loan if you can show that the delay is legitimate.
3. Fairer Costs and Fewer Penalties
One of the FCA’s main goals is to prevent "consumer harm." In the past, some bridging lenders would charge eye-watering fees if you needed to extend your loan past the initial term.
Because the FCA is now scrutinising these term limits, they are also looking at the costs associated with them. They want to ensure that if a borrower needs a bit more time, they aren't being exploited by hidden charges or "default" interest rates that double the cost of the borrowing.
What it means for you: Expect more transparency. Lenders will need to be clearer about what happens if you go over your term. At Hunter Capital, we always help our clients look at the latest updates in lending to ensure they are getting a fair deal from our panel of lenders.
4. Better Outcomes for Complex Scenarios (Like Probate)
Probate is a common reason for needing a bridging loan. When a loved one passes away, you might need to pay inheritance tax or fix up the property before it can be sold.
The legal process of probate is notoriously slow. Often, it takes longer than 12 months just to get the legal right to sell the property. Under the old strict rules, a bridging loan for probate was a high-risk move because the 12-month limit was so tight.
What it means for you: The FCA review specifically highlights probate and complex chains. The shift in 2026 means lenders are becoming more comfortable with these "slow-burn" situations, offering products tailored to the actual time these legal processes take.
5. A Stronger Focus on Your "Exit Strategy"
While the FCA is making things more flexible, they aren't making them "easy." The trade-off for longer terms is that lenders will be looking even more closely at your exit strategy.
An exit strategy is simply your plan for how you’ll pay the money back. Usually, this is:
- Selling the property.
- Refinancing onto a long-term mortgage (like a residential mortgage or a BTL mortgage).
What it means for you: You’ll need to prove that your exit plan is solid. If you plan to refinance, you’ll need to show you can actually get that mortgage. If you’re looking to refinance a bridging loan, it’s vital to speak to a broker early to make sure the "permanent" mortgage is ready to go when you need it.
Why This Matters for the Oldham Property Market
Here in Oldham, we have a fantastic mix of older terraced properties that are perfect for "fix-and-flip" investments and larger family homes that often get caught in long chains.
With local house prices remaining competitive compared to the rest of Greater Manchester, many people are using bridging loans to secure properties quickly before they are snapped up by other buyers. The FCA's review makes this a much safer and more viable option for local families and investors alike.
Whether you are looking at a conversion project in Chadderton or trying to buy a new build in Royton before your current home sells, these more flexible rules give you the "bridge" you need without the unnecessary stress of a 12-month deadline.
Frequently Asked Questions (FAQ)
Is a bridging loan more expensive than a normal mortgage?
Yes, generally. Because they are short-term and fast, the interest rates are higher than a standard 25-year mortgage. However, you usually only pay the interest for the few months you have the loan.
What is a "Regulated" vs "Unregulated" bridging loan?
A Regulated loan is secured against a property you live in (or plan to live in). These have more protections from the FCA. An Unregulated loan is usually for investment properties or commercial use. The new FCA review focuses heavily on making the regulated side fairer.
Can I get a bridging loan if I have bad credit?
It is possible. Because bridging loans are secured against property, lenders are often more interested in the value of the house and your "exit strategy" than your credit score. However, a better score will always get you a better rate.
How long does it take to get a bridging loan?
One of the main benefits is speed. While a standard mortgage can take 2-3 months, a bridging loan can often be arranged in 1-2 weeks, which is why they are so popular for auction purchases.
Do I need to make monthly payments?
Most bridging loans allow you to "roll up" the interest. This means you don't pay anything monthly; instead, the interest is added to the loan and you pay it all back in one go at the end.
How Hunter Capital Can Help
Navigating the world of bridging finance can feel like a bit of a maze, especially with the FCA changing the rules in 2026. You don't have to do it alone.
At Hunter Capital, we specialise in everything from commercial mortgages and HMO mortgages to complex development finance. We take the time to understand your project and find the lender that offers the best term and rate for your specific situation.
If you’re worried about timescales or want to know if a bridging loan is the right move for your next property purchase, let’s have a chat.
Ready to start your property journey? Book a free consultation with our expert team today or contact us to learn more.