What is a regulated bridging loan?

A regulated bridging loan is one where the security property is or will be occupied by the borrower or a close family member as their main residence. Regulated bridging loans fall under FCA mortgage regulation (MCOB rules) and the lender must be FCA-authorised. The borrower receives additional consumer protections including affordability assessment and a right to complain to the Financial Ombudsman.

What is an unregulated bridging loan?

An unregulated bridging loan is one where the security property is not the borrower's main residence — for example, a buy-to-let, investment property, commercial property, land, or a property being purchased for development or resale. These loans fall outside FCA mortgage regulation. Lenders do not need FCA authorisation for unregulated bridging. The borrower does not receive the same consumer protections as regulated borrowers.

Does AF Credit provide regulated bridging loans?

No. AF Credit provides unregulated bridging loans only. We do not lend on properties that are or will be occupied by the borrower as their main residence, as this constitutes regulated mortgage activity requiring FCA authorisation. All AF Credit lending is for investment, commercial or development purposes.

How do I know if I need a regulated or unregulated bridging loan?

The test is simple: will you or a close family member live in the security property as your main residence? If yes, the loan is regulated. If no — it is a buy-to-let, investment property, commercial property, land or development — the loan is unregulated. If you are unsure, speak to a solicitor or a financial adviser before proceeding.

Is an unregulated bridging loan riskier than a regulated one?

Both types carry the same fundamental risk: the property is used as security and may be repossessed if the loan is not repaid. Unregulated loans do not carry the FCA consumer protections (affordability assessment, Financial Ombudsman access) but these protections are designed for consumers borrowing against their homes — investors and developers operating via companies are generally considered to be able to protect their own interests.

Can I get an unregulated bridging loan as an individual or do I need a company?

Both individuals and companies can take out unregulated bridging loans, provided the security property is not their main residence. A landlord borrowing in personal name against a buy-to-let property is taking an unregulated loan. A developer borrowing via a limited company against a development site is also taking an unregulated loan.

Regulated vs Unregulated Bridging Loan | What's the Difference?

The core distinction

Under the FCA's Mortgage Credit Directive Order and MCOB rules, a bridging loan is regulated if the security property is or will be occupied by the borrower (or a close family member) as their main residence. Everything else — buy-to-let, commercial, land, development — is unregulated.

This is not a choice the borrower makes. It is determined by the nature of the property and how it will be used.

Scenario	Regulated or unregulated?
Bridging loan on your main home	Regulated
Buying a home to live in via bridging (chain break)	Regulated
Bridging on a buy-to-let property	Unregulated
Bridging on commercial property	Unregulated
Bridging on a refurbishment / development property	Unregulated
Bridging on a property you plan to sell	Unregulated
Auction purchase for investment	Unregulated
Probate — bridging on inherited property (not your home)	Unregulated
Limited company borrowing against investment property	Unregulated

What regulated bridging means in practice

Regulated bridging loans are subject to FCA Mortgage Credit Directive rules. The lender must be FCA-authorised and must carry out an affordability assessment — not just assess the security and exit. The borrower receives consumer protections including access to the Financial Ombudsman Service (FOS) if they have a complaint.

Regulated loans are typically used for chain-break situations — where a buyer needs to complete their onward purchase before their existing home sale completes — and for other scenarios where the borrower will live in the security property. They are less common than unregulated loans in the broader bridging market.

AF Credit does not provide regulated bridging loans. If you need a loan secured against your main home, you will need an FCA-authorised lender. We are happy to point you in the right direction.

What unregulated bridging means in practice

Unregulated bridging loans are not subject to FCA mortgage rules. The lender does not need to be FCA-authorised for this activity (though they may be authorised for other products). There is no mandatory affordability assessment — the primary assessment is the security, the LTV, and the exit strategy.

This does not mean unregulated loans are unregulated in the broader sense. Lenders are still subject to consumer credit law, anti-money laundering regulations, data protection law, and the general law of contract. The absence of FCA mortgage regulation means the specific MCOB rules (affordability, cooling-off, etc.) do not apply.

Why unregulated bridging is faster

The affordability assessment required for regulated loans adds time and documentation requirements. Unregulated bridging — assessed primarily on security and exit — can move faster because the underwriting focus is narrower. This is one reason why auction bridging loans, refurbishment finance and commercial bridging are typically completed faster than regulated residential mortgages.

The third-party charge question

A common scenario that sits in a grey area: a borrower wants to use their main home as additional security for an unregulated loan (for example, using their home as a third-party charge to support a limited company's commercial loan). In this case, the main home element may be regulated even if the primary loan is unregulated. AF Credit does not lend against properties occupied by borrowers as their main residence — including as third-party charges. We use the company director's main residence only as third-party security where the borrower is a limited company and the property is not the charge-giver's main residence.

If you are unsure about the regulatory position of your proposed structure, speak to a solicitor before proceeding.

Does regulation affect rates or LTV?

Regulated vs unregulated status does not directly determine the rate or LTV. These are determined by the risk profile of the deal — property type, location, LTV, exit strategy and borrower profile. However, regulated loans often carry slightly different rate structures because of the additional compliance burden and longer processing time they impose on lenders.

AF Credit: unregulated bridging only

All AF Credit lending is unregulated bridging finance for investment, commercial and development property in England and Wales. We lend to individuals and companies purchasing or refinancing properties that are not — and will not become — the borrower's main residence.

Our typical borrowers are property investors, landlords, developers and executors — all operating in an unregulated context. If your situation is regulated, we cannot help directly, but we can advise on what type of lender you need.

Unregulated bridging — same-day terms

AF Credit lends on investment and commercial property across England and Wales. Up to 75% LTV from 0.79%/month. Direct decision, no committee.

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Guide

Regulated vs Unregulated Bridging Loans