What is bridge to let?
Bridge to let is two loans in sequence: a short bridge to buy the property, then a buy-to-let mortgage that repays it. Some lenders offer both. It's one of the most common jobs for a bridging loan on an investment property.
When does bridge to let make sense?
- The purchase deadline is too short for a mortgage — for example an auction purchase.
- The property needs work before a mortgage lender will lend on it — see refurbishment bridging.
- You're converting the property, for example into an HMO, which Shawbrook lists among the uses of its bridging loans.
If none of these apply and you have time, going straight to a buy-to-let mortgage is usually cheaper.
What's the main risk?
That the refinance doesn't happen on time or for enough. The buy-to-let lender will value the finished property and test the rent, and if the numbers come in short you may need to put more money in, sell, or extend the bridge. The Personal Finance Society notes that unregulated bridging rates can rise if a loan runs past its term, so build in time for delays.
How do you plan the exit?
- Talk to a buy-to-let lender or broker about the refinance before you take the bridge.
- Use realistic rents and values, not best-case ones.
- Keep a fallback exit, such as a sale.
- Price the bridge for the whole likely term in the calculator.
Can a limited company use bridge to let?
Yes. Many landlords hold rental property in a limited company or SPV, and bridging lenders such as Shawbrook lend to property investors. The bridge stays unregulated as long as no one connected to the borrower will live in the property (PFS).
Is bridging right for you?
Bridging is short-term borrowing secured on property, and the lender can take that property if the loan isn't repaid. Only use it with a realistic exit, and compare it with a standard buy-to-let or commercial mortgage first — if you have time to wait for one, it usually costs less. Speak to your accountant or solicitor if you're unsure.