When bridging suits a KDR
The classic case is when the existing property must be vacated and demolished before equity can be released against the new build. A bridging facility unlocks the funds for foundations and shell; once the new dwelling is wind-and-watertight, a self-build or standard residential mortgage refinances the bridge.
2026 rate range
Regulated bridging (owner-occupier) 0.75-1.10% per month. Unregulated bridging 0.85-1.25% per month[FCA bridging]. Arrangement fees 1.5-2.0% of facility; exit fees 0-1.5%; valuation fees £500-£1,500. Set-up under 4 weeks is standard.
Exit strategy
Three exits: (1) refinance to self-build mortgage on completion (most common, requires lender pre-agreement); (2) refinance to standard residential mortgage on the completed new dwelling; (3) sale of the new dwelling. Lenders price the loan on the strength of the exit; missing the exit is the most expensive mistake in UK self-build finance.
Risks
(a) Rate-resets if Bank Rate moves materially before exit[BoE Bank Rate]. (b) Down-valuation at remortgage if local prices soften. (c) Planning condition discharge or warranty sign-off delay pushing exit past facility expiry, triggering default rate (typically 3% per month).