The FCA wants to double the regulated bridging term to 24 months.
CP26/18 would double the regulated bridging term. A quieter change matters more.
The FCA published CP26/18, the mortgage rule review consultation covering first-time buyers and underserved consumers, in June. Consultation closed on 28 July, and the policy statement is expected in the second half of this year. Most of the coverage focused on first-time buyers, variable income and later-life lending. Buried in the same paper is a set of proposals that would materially change how regulated bridging works, and the broker market has been remarkably quiet about it.
What is actually proposed
Three changes matter for bridging:
Responsible lending requirements stay in place throughout. The FCA is not removing the duty to check that a loan is affordable. What it is doing is stripping out a piece of process that generates friction without generating protection.
The third proposal is the one that matters
Extending the term ceiling from 12 to 24 months is useful, but the affordability reassessment change will be felt in practice. Under the current rules, a borrower whose regulated bridge needs an extension undergoes an affordability assessment as if they were applying afresh. That is the wrong test at the wrong moment. The borrower has not changed. The security has not changed. What has changed is usually that a sale is progressing more slowly than planned or a refinance is taking longer to complete, which is precisely the situation in which a bridge exists to cover. Putting a full reassessment in the way at that point creates delay, cost and occasionally a forced sale, in a case that would otherwise have resolved itself in a few more weeks.
Who this affects, and who it does not
These proposals apply to regulated bridging, which broadly means loans secured on a property the borrower or a close family member occupies, taken for personal rather than business purposes. Most of the bridging and development finance Credco arranges is unregulated because it is used for business or investment purposes, and unregulated bridging is not directly affected by any of this. But the two markets do not sit in separate rooms. Many lenders write both. Where the FCA sets an expectation on the regulated side, market norms on the unregulated side tend to drift toward it over time. A 24-month regulated ceiling makes a 24-month unregulated term look less like an outlier.
The catch: permissive does not mean automatic
The proposals are largely permissive. They allow lenders to do things they currently cannot; they do not require them to. Firms that choose to adopt the flexibilities will be expected to demonstrate robust governance, clear evidence that the product suits its target market, evidence of customer understanding, and proactive outcomes monitoring. That is not a small ask. Expect a split: some lenders will move quickly to differentiate on it; others will decide the compliance overhead is not worth it; and, for a period, the market will be uneven. Knowing which lender sits where will matter more than the rule change itself.
What to do about it now
If you have a regulated bridge running with an extension likely, the timing of the policy statement is worth watching, because a case that extends after the rules change may face a materially lighter process than one that extends before. If you are structuring a new case, it is worth asking whether the lender intends to adopt the flexibilities, since that answer will shape what happens if the exit slips. And if you are advising clients, this is a good conversation to be having now rather than after the policy statement lands. Across second-charge bridging, auction finance, and the wider short-term book, the extension question is the one that determines whether a stretched deal resolves or unravels. Get in touch if you want to talk it through.