Bridging finance is widely used in the UK and several European Union (EU) countries, but the way it works varies depending on the market. Different regulations, lender types, and borrowing criteria mean that getting a bridging loan in Germany, France, or Spain isn’t quite the same as in the UK.
This article breaks down the key differences between these markets, from market maturity to interest rates and regulations.
Market Maturity and Availability
The UK has one of the most developed bridging finance markets in the world. A wide range of lenders – including banks, specialist finance providers, and private lenders – offer bridging loans for all sorts of purposes, from buying property to funding developments. The competition between lenders means borrowers can access more flexible terms and innovative products.
Germany’s bridging finance market is more traditional and bank-focused. While it is growing, it remains smaller than the UK’s and is subject to stricter regulations. German lenders are generally cautious, which means fewer options and stricter lending criteria. However, awareness of bridging loans is increasing, leading to a slow but steady expansion of the market.
Bridging loans in France are mainly offered by banks and are most commonly used by high-net-worth individuals or professional property investors. French lenders provide a product called “prêt relais,” which helps buyers fund a new home purchase before selling their current one. However, options are more limited, and the market is not as competitive as in the UK.
Spain’s bridging finance sector is still developing but has become more attractive to both local and international investors. While the market isn’t as mature as the UK’s, it is expanding as Spain’s real estate sector recovers. More lenders are entering the space, making short-term property financing more accessible than before.
Interest Rates and Lending Criteria
United Kingdom
Interest rates on bridging loans in the UK vary based on the lender, risk level, and loan-to-value (LTV) ratio. Thanks to a competitive market, borrowers can often find better rates and more flexible terms. Many lenders are also open to considering unconventional security and alternative forms of income evidence.
Germany, France, and Spain
Bridging loan interest rates in these countries tend to be higher than in the UK due to smaller, less competitive markets. Lending criteria are also stricter, with lenders placing more emphasis on the borrower's financial stability and collateral quality.
In France and Spain, banks are particularly focused on a borrower’s ability to repay, meaning that some applicants may find it harder to secure a loan.
Regulatory Landscape
United Kingdom
Bridging finance in the UK is regulated by the Financial Conduct Authority (FCA), ensuring fair lending practices while allowing for innovation and competition in the market.
Germany, France, and Spain
While all three countries follow general EU financial regulations, they each have national rules that affect how bridging finance operates. These regulations can sometimes make borrowing more bureaucratic and restrictive, depending on the country.
Bridging Finance for Non-Doms and Expats
With increasing international interest in the UK property market, we offer bridging loans for non-domiciled individuals (non-doms) and expats. These loans are ideal for foreign investors or UK nationals living abroad who want to buy or invest in property in England or Wales.
At TBG, we can provide tailored solutions to overcome the challenges international buyers often face, such as higher interest rates and stricter lending criteria.
As bridging finance grows in Europe, opportunities for short-term property financing are increasing. However, for now, the UK remains the most established market, offering the widest range of options and most competitive terms.