FCA Discussion Paper: Rethinking the 12-Month Regulated Bridging Term Limit

The Financial Conduct Authority (FCA) has recently opened a discussion on one of the key rules that has shaped the UK bridging loan market for years — the 12-month maximum term for regulated bridging loans. As a fully FCA-regulated lender, Greenfield Bridging welcomes this review and sees potential for a positive step forward — provided that any changes focus on genuine customer need rather than encouraging speculative or higher-risk borrowing.

Why the 12-Month Limit Exists

Currently, any bridging loan that is regulated — typically where it’s secured against a property that the borrower or a close family member lives in or intends to live in — cannot exceed a 12-month term. The rule was designed to:

• Keep bridging loans as a short-term funding solution, distinct from mainstream mortgages.
• Encourage clear and viable exit strategies, ensuring borrowers can repay the facility quickly.
• Limit consumer harm, as bridging loans carry higher interest rates and are often interest-only with rolled-up payments.

While this framework has provided strong consumer protection, there are cases where the strict 12-month limit can be too rigid, particularly in today’s property market.

The Case for More Flexibility

In recent years, bridging loans have evolved far beyond their original purpose of simply “bridging a gap” between buying and selling a property. They are now used for:

• Major refurbishments or redevelopment projects that may take more than 12 months to complete.
• Complex chain break scenarios, especially where the onward sale may be delayed by factors outside the borrower’s control.
• Cases where planning permission or external regulatory requirements extend project timelines.

At Greenfield Bridging, we have seen situations where a 14- or 18-month facility have been requested for a variety of understandable reasons but wasn’t possible under existing rules.

Our View: Cautious Support for Change

We support the FCA’s exploration of allowing regulated bridging loans to run for longer than 12 months, but only where it truly makes sense for the borrower. Any change should:

1. Be linked to clear borrower outcomes – extended terms should only be approved where there is a realistic exit strategy and a clear timeline.
2. Avoid fuelling speculation – longer terms must not be used to back higher-risk or purely speculative transactions.
3. Maintain rigorous oversight – Suitability assessments, and transparent fee structures must remain central to the process.

Our priority will always be responsible lending. While we recognise the benefits of more flexibility, we must ensure the core purpose of regulated bridging — providing a short-term, solution-focused product — remains intact.

What This Means for Borrowers

For homeowners or small developers, this potential rule change could mean:

• Less pressure to refinance mid-project, reducing fees and administrative burden.
• The ability to plan more realistically for longer refurbishments or complex moves.
• More tailored bridging solutions that fit the real-world timelines of today’s property market.

However, borrowers should also be aware that longer terms mean more interest accruing. Careful planning and advice from a regulated broker remain essential.

Looking Ahead

The FCA’s discussion is still at an early stage, and any changes will take time to be implemented. At Greenfield Bridging, we will continue to share insights from our experience as an FCA-regulated specialist lender. Our message is clear: we welcome reform that supports consumers and enables sensible lending, but we will always advocate for strong safeguards to prevent misuse.

Final Thoughts

The bridging market is growing rapidly, with demand for flexible, fast funding solutions higher than ever. By revisiting rules, the FCA has an opportunity to create a framework that reflects the modern property landscape — one that balances flexibility with protection. Greenfield Bridging will continue to be a voice for responsible innovation in the sector.