What Is a Regulated Bridging Loan, and How Do You Refinance One?

The test is occupation, not the type of property. A bridging loan secured against a house or flat that you, or your spouse, partner, parent or child, live in or plan to live in is a regulated mortgage contract. A common example is a chain break bridge, where you have exchanged on a new home before your existing one has sold, and the bridge is secured on the property you are about to move into or the one you still live in.

By contrast, a bridging loan secured on commercial premises, an investment or buy to let property, or a property being bought purely for refurbishment and resale with no intention of anyone living there, is unregulated commercial lending. The same borrower can have a regulated loan on one property and an unregulated loan on another at the same time, so it is worth checking each case on its own facts rather than assuming.

The difference between regulated and unregulated bridging loans comes down to occupation and, as a result, who is allowed to arrange the lending. A regulated bridging loan must involve a firm directly authorised by the Financial Conduct Authority, which carries out the regulated activity and gives any advice you are entitled to. An unregulated bridging loan, secured on commercial, investment or refurbishment property, is arranged as ordinary commercial finance with no such requirement, though reputable brokers and lenders still apply strong standards of conduct.

Regulated status generally means more consumer protection built into the process, including affordability checks and clearer disclosure, but it does not automatically make one type of loan better than the other for a given deal. It simply determines which rulebook, and which firm, the case must run through.

We are a broker and introducer, not a lender, and on a regulated case we are not directly authorised by the Financial Conduct Authority ourselves to carry out the regulated activity. Where your bridging loan is regulated, we introduce your case to a firm that is directly authorised by the Financial Conduct Authority, and that firm carries out the regulated activity and provides any advice you need on the refinance. We manage the introduction and keep the process moving, but the regulated advice itself sits with our authorised partner.

This split exists to protect you. It means someone whose job it is to assess whether a regulated mortgage contract is suitable for your circumstances is doing exactly that, rather than the introduction and the advice sitting with the same party.

Expect a more thorough process than an unregulated commercial refinance, because the authorised firm has to satisfy itself the new facility is suitable and affordable for you. That typically means income and expenditure checks, a clear explanation of the new mortgage or bridging terms in writing, and confirmation of your exit strategy before the case completes. If a standard residential mortgage is the exit, the authorised firm will assess you against that lender's normal residential criteria, not bridging criteria.

The property, term and any second charge already in place will also be reviewed, and a fresh valuation is usually needed. None of this should come as a surprise if your original bridging loan was itself arranged on a regulated basis, since the same standard of care applies at the refinance stage.

Some are and some are not, and that is the point worth remembering rather than a single yes or no answer. Bridging loans secured on a home occupied, or to be occupied, by the borrower or their immediate family fall under the Financial Conduct Authority as regulated mortgage contracts. Bridging loans secured on commercial, investment, buy to let or refurbishment property do not, and sit outside that regime as unregulated commercial lending arranged directly between broker, lender and borrower.

If you are unsure which category your loan, or your planned refinance, falls into, it is worth confirming before you start comparing lenders, since it determines which firm can legally carry out the work.

No, not as a category, though the market has had its share of poor practice over the years, usually from unlicensed operators or unclear fee structures rather than the product itself. A bridging loan is simply short term, higher cost finance for a specific window, and the regulated and unregulated split exists precisely to make sure the right level of oversight applies to the right cases.

The best protection is working with a broker who is upfront about which regime your case sits in, who names the authorised firm handling any regulated advice, and who sets out costs, fees and the exit strategy in writing before you commit to anything.