In the UK, bridging loans fall into 2 categories: regulated and unregulated.
Understanding these categories is key, as each has its own rules and practical implications.
To help you navigate these differences, this article explains what determines whether your loan is regulated or unregulated and how that affects your deal.
How are bridging loans regulated?
Most bridging loans are not regulated, though some are.
The Financial Conduct Authority (FCA) steps in to regulate a bridging loan only when the property used as security is someone’s home. In all other situations, the loan falls outside these regulatory rules.
The rules for this are quite specific. A loan becomes regulated if at least 40% of the property is, or will be, a home for you or a close family member.
To decide how your loan is classified, lenders look at 3 key facts:
- Who is borrowing
- Which property provides the security
- Who occupies that property, or intends to
Notice what is missing from that list: your own preference. You cannot request a specific category, and lenders cannot change it for you. The decision is based strictly on the facts of your situation, not on what you would prefer.
This distinction matters more than you might think. For instance, you cannot simply ask to be treated as unregulated to avoid affordability checks. Likewise, if you describe a property as an investment but a family member intends to live there, it creates complications for everyone involved.
What is the difference between regulated and unregulated bridging loans?
In a nutshell, here is how regulated and unregulated bridging loans compare:
Regulated bridging loans are designed to protect homeowners. This means they include affordability checks, advice standards, and access to the Financial Ombudsman Service. These protections lead to slower processing and stricter criteria, which makes sense when someone’s home is at stake.
As a result, regulated bridging is not designed for investors. You cannot opt into it unless your situation meets all the required criteria.
On the other hand, unregulated bridging loans are intended for properties held as assets. This category includes buy-to-let, commercial, mixed-use, land, and properties owned by limited companies. In these cases, the FCA’s residential mortgage rules do not apply, so lenders have more freedom to assess risk and structure the loan.
This is your category.
One caveat worth knowing: A loan secured against a home you live in can be regulated, even where the money funds an investment purchase. The security decides it, not the property you are buying.
Which type of bridging loan is right for you?
If you are a property investor looking to buy a buy-to-let property, your loan will fall into the unregulated category.
So the useful question is not which product to pick. It is what you are accepting by borrowing on the unregulated side, and what to check before you sign.
With unregulated bridging, you give up the consumer protections offered by the FCA. This means that affordability and suitability rules no longer apply. The contract you sign is a commercial agreement between two parties, and both are expected to fully understand the terms.
Do not assume the Financial Ombudsman Service will take your case. And do not assume the courts are your only route, because an authorised firm can still carry obligations under other rules.
For this reason, you should read the facility letter as the commercial document it is. There are 6 key factors that will decide whether your deal holds up:
- The exit strategy: Whether your repayment plan still works if it runs a few weeks late.
- The rate, and how interest is charged: Retained, rolled up or serviced. Each changes what you receive.
- The net advance: What lands in your account after fees and retained interest.
- Every fee: Arrangement, valuation, legal and exit.
- Default interest: Ask for the figure and the day it starts applying. Not a reassurance that it rarely happens.
- Extension terms: An extension is not a right. Ask what one costs and who decides.
Of all these factors, the exit strategy is the most important. In practice, deals rarely fail because the loan type was wrong. More often, they fail because the exit strategy was never properly stress-tested.
Unregulated bridging: use cases and advantages
Often, investors turn to unregulated bridging when a purchase cannot wait for a traditional mortgage to come through.
Here are some of the most common situations where unregulated bridging is used:
- A buy-to-let purchase where the mortgage is delayed or declined
- An auction lot with a 28-day completion deadline
- Refurbishing a property before letting it and refinancing
- Releasing equity from one property to fund the next
- Buying through a limited company or SPV
- Commercial, mixed-use or land purchases
Unregulated bridging brings several advantages, most of which come from sitting outside the FCA’s mortgage rules:
- Speed: Fewer required steps, so straightforward cases complete in days rather than weeks.
- Company borrowers welcome: Limited companies, SPVs and offshore structures are standard here, not exceptions.
- Non-residents accepted: Your nationality and residency do not affect the classification.
- Longer terms available: Up to 24 months with some lenders, against 12 for regulated.
- Flexible security: Multiple properties, second charges and unusual titles are all workable.
Of course, there are important costs to consider as well. When reviewing your deal, always ask for two numbers, not just one: the total repayment figure, and the amount you actually receive on day one.
For example, say you take out a £300,000 bridge loan over six months at 1% per month, with interest retained and a 2% arrangement fee:
- Interest retained upfront: £18,000
- Arrangement fee: £6,000
- Net advance to you: £276,000
- Repaid at exit: £300,000, plus valuation and legal costs
These numbers are for illustration purposes only. Your actual figures will depend on your lender, the loan term, and the property itself.
The key point is that retained interest reduces the amount you can draw down, so you should always budget based on the net advance. If you want to learn more about where real costs can arise, see our article on 7 bridging loan myths.
Why choose GoGoProp for unregulated bridging finance?
We lend on the unregulated side, so everything above applies to us as much as to any other lender. Read our facility letter as the commercial document it is, and put those 6 questions to us.
What we offer overseas investors buying residential buy-to-let in England and Wales:
- £100,000 to £750,000, up to 75% LTV
- Terms of 3-12 months
- Fixed at 1% a month for all nationalities, disclosed upfront
- Approval within 24 hours, funding in around 10 days
- Fully online, with no UK broker or branch visit required
The rate is the same whoever you are, so your nationality never changes your price. And there is no penalty for repaying early, which matters when your exit lands sooner than planned.
GoGoProp lends under Money Lending Licence No. 1341/2025.
Note: Treat 10 days as a target rather than a promise, because your timeline depends on how quickly checks and legals clear. Our article on how long a bridging loan takes explains what tends to slow things down.
Key takeaways
- If you are buying property to let out, you are only eligible for an unregulated bridging loan.
- The FCA regulates a bridging loan only where at least 40% of the secured property is a home for the borrower or close family.
- You cannot choose your category. The borrower, the security and the occupation decide it.
- This applies whether you buy personally or through a limited company, and regardless of your nationality or residency.
- Unregulated bridging brings speed, company borrowers and flexible security. It also brings fewer protections and no reliable Ombudsman route.
- Ask for the total repayment figure and the net advance. Retained interest and fees mean you draw down less than the headline loan.
- GoGoProp offers unregulated bridging from £100,000 to £750,000 at up to 75% LTV, fixed at 1% a month, on 3-12-month terms.
FAQs
Do unregulated lenders still check affordability?
Yes, though not to the FCA’s prescribed standard. Expect questions about your income, existing debts and how you will cover the interest. The difference is that the lender weighs the property and your exit more heavily than a regulated lender would.
Does a personal guarantee make my loan regulated?
No. A guarantee is security for the lender, not a change of category. Classification still turns on who borrows, what secures the loan, and who occupies the property.
Do I need UK credit history or UK residency to qualify?
Neither is a requirement with every lender. A strong property and a clear exit can carry more weight than a thin UK credit file. Our 7 bridging loan myths piece covers what lenders actually assess.
Can a limited company get a regulated bridging loan?
Generally no. The FCA’s mortgage rules cover credit given to individuals and trustees, not companies. A loan to your limited company or SPV falls outside them.
Is GoGoProp FCA-regulated?
We write unregulated bridging loans, which sit outside the FCA’s residential mortgage rules. GoGoProp Finance UK Limited is registered in England and Wales (16843726). Ask us for our permissions in writing.
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