Rapid financing does not excuse poor safeguards. Fast bridging lenders must still treat customers fairly, run anti‑money‑laundering checks, and publish transparent costs. Over the past decade, the Financial Conduct Authority (FCA) has tightened requirements and introduced Consumer Duty guidance that applies even to unregulated business‑purpose bridges. This article sets out the current rulebook, shows how reputable lenders meet their obligations while keeping completion times short, and offers borrowers a checklist to judge whether a provider deserves their signature.
Regulated Versus Unregulated Bridges
In the United Kingdom, a quick bridging loan secured on a borrower’s main residence—and raised for personal reasons such as moving home—is regulated by the FCA under the Mortgage Credit Directive. A loan secured on an investment property for business or commercial use is often exempt. Nevertheless, most reputable firms apply similar underwriting standards to both segments because the reputational risk of poor practice spans all products.
For regulated loans, the lender or broker must offer a Key Facts Illustration, complete affordability checks, and give the borrower at least seven days to reflect on the binding offer. Fast bridging firms accommodate the reflection period by beginning legal work while the clock runs, so the overall timetable remains short.
Consumer Duty and Transparent Pricing
In July 2023 the FCA introduced an overarching Consumer Duty, centred on four outcomes: products and services, price and value, consumer understanding, and consumer support. Bridging lenders responded by publishing price matrices on their websites, replacing vague “from” rates with clear brackets tied to loan‑to‑value, property type, and borrower profile. Fee tables now list not only arrangement fees but also funds transfer fees, redemption administration charges, and default interest terms.
Borrowers should read the Offer Document’s front page summary. The cost of credit over the loan’s minimum term appears as a single figure, allowing like‑for‑like comparison. Firms that hide fees in annexes or omit default interest policies warrant caution.
Speed Versus Due Diligence
A common misconception is that “fast” equates to “light‑touch”. In truth, the quickest lenders reach speed by performing due diligence in parallel rather than skipping steps. Anti‑money‑laundering checks run through electronic databases, producing results within minutes. Biometric identity verification over a smartphone camera removes the postal delay associated with certified copies of passports. Open banking feeds provide six months of bank statements instantly, satisfying source‑of‑funds requirements.
Similarly, legal searches remain thorough. Where a local authority returns drainage or planning data slowly, the lender may accept an indemnity insurance policy, but only after verifying no past enforcement action on the title. This approach transfers risk to a regulated insurer, rather than to the borrower.
Valuation Standards and Responsible Valuers
The Royal Institution of Chartered Surveyors (RICS) oversees valuation practice. Bridging lenders can choose between a full site inspection and a desktop or drive‑by survey, depending on loan‑to‑value and property complexity. Where a desktop model is used, the valuer must check at least three comparable sales within the past six months and confirm the property is not subject to Japanese knotweed, severe subsidence, or cladding issues. Borrowers wary of an undervalued property may instruct their own RICS valuer to cross‑reference the lender’s figure.
Borrower Protections in Default
Fast bridging contracts include default interest clauses that may raise the rate by several percent once the loan passes maturity. The FCA expects lenders to treat borrowers in financial difficulty fairly. In practice, reputable firms issue reminder letters three months, one month, and one week before maturity. They may agree extensions where the borrower demonstrates a viable refinance or sale underway. Excessive default rates—rarely above 2 percent per month—would attract regulatory attention.
Receivership is a last resort. Lenders appoint Law of Property Act receivers only when negotiations fail and the security faces erosion in value. Even then, the receiver must achieve market value for the asset, document marketing activity, and return surplus proceeds to the borrower.
Industry Codes and Ombudsman Access
The Association of Short Term Lenders (ASTL) and the Financial Intermediary & Broker Association (FIBA) both publish codes of conduct that exceed the baseline set by the FCA. Members pledge to deliver decisions on complaints within five business days and to keep marketing materials free from misleading claims. Borrowers dealing with an ASTL or FIBA member gain access to an independent complaints process that can require redress if wrongdoing is found.
For regulated bridging loans, the Financial Ombudsman Service provides a further safety net. Awards can reach £415,000, and the service costs nothing to the complainant. Unregulated borrowers may still raise issues through civil court or seek mediation, but choosing an ASTL member often makes that step unnecessary.
Checklist for Borrowers
Before signing, borrowers should confirm seven points: lender’s FCA registration, ASTL or FIBA membership, full disclosure of all fees in a single document, clear default interest terms, evidence of a RICS valuation, anti‑money‑laundering clearance, and proof that legal advice is independent or dual‑represented at the borrower’s request. Providers who hesitate on any item may not align with current market best practice.
Fast bridging finance flourishes when trust runs both ways. Regulators establish the floor, trade bodies raise the ceiling, and diligent borrowers keep standards high by demanding clarity. The result is a market where speed and safety coexist, enabling swift transactions without sacrificing responsible conduct.