FCA to review 12-month term limit for regulated bridging loans

The FCA has announced that it will explore options to update the 12-month term limit for regulated bridging loans.

Within the FCA’s Mortgage Rule Review Feedback Statement (FS25/6), the regulator has said: “Most respondents supported extending the existing 12 month term for regulated bridging loans to reflect the timescales for building, buying and selling property and settling probate, all of which can take more than 12 months.”

It added: “We will explore options to update the term limit and extension requirements for regulated bridging loans. We will further evaluate the difficulties caused by the current term limit, and the potential harm that could be caused by more flexible term extension options and a longer defined term limit.”

In response to the Feedback Statement, Vic Jannels, CEO of the BDLA, commented: “This is an area that we’ve been campaigning about for some time and we’re pleased the FCA has taken on board the concerns raised by the BDLA and the wider industry, regarding the 12-month term limit on regulated bridging lending.

“Regulated bridging loans are often used by consumers at high-pressure moments – from auction purchases to refurbishment projects and probate – and a one-size-fits-all 12-month cap doesn’t reflect market realities.

“We have consistently said the current rules can unintentionally penalise borrowers facing unavoidable delays – whether that’s material shortages, chain breaks or a slower sales market. The FCA’s recognition of these challenges is a welcome step forward.

“This isn’t about relaxing protections. It’s about ensuring bridging finance remains a practical solution, backed by robust underwriting and a credible exit. A more flexible approach – with the right safeguards – will ultimately deliver better outcomes for consumers and lenders alike.”