Why 2026 Will Be the Year of Second Charge Bridging Loans

Summary

• Second charge bridging loans are gaining momentum in the UK, letting property owners access equity without changing their main mortgage.
• The market saw strong growth in 2025 - new business volumes up 13% year-on-year (FLA).
• Demand is rising as more borrowers want liquidity but wish to keep their existing low-rate mortgages.
• Brokers and lenders, including Somo, expect continued growth and are improving the process with digital tools and faster approvals.
• With a stable housing market and evolving borrower needs, 2026 is set to be a breakthrough year for second charge bridging loans as a mainstream finance option.

Why 2026 Will Be the Year of Second Charge Bridging Loans

Second charge lending is rapidly moving from a niche product to a mainstream solution in the UK property finance market. With robust growth, evolving borrower needs and a shifting economic landscape, 2026 is set to be a pivotal year for second charge loans. 

According to the Finance & Leasing Association (FLA), new business volumes in the second charge mortgage market continued to grow through 2025, with year-on-year increases in most months and some of the strongest monthly totals since 2008. The FLA also noted that new business volumes in the nine months to September 2025 were about 13% higher than a year earlier. 

What Is a Second Charge Bridging Loan?

A second charge loan is a loan secured against a property that already has a first mortgage. It lets borrowers unlock equity without disturbing their existing mortgage deal - retaining their preferred first-charge rate while accessing funds for business needs such as renovations, debt consolidation or investment.

Why Demand for Second Charge Bridging Loans Is Surging

• Market Momentum - The second charge market has shown consistent growth across 2025, with FLA data indicating that new business volumes climbed about 13% over the first nine months of the year compared with 2024, and monthly figures hitting their highest level in many years. (fla.org.uk)

• A Practical Solution for Borrowers - Today’s mortgage environment is shaped by many homeowners holding attractive legacy rates and wanting liquidity without costly remortgage penalties. Second charge loans allow access to equity without giving up those preferred first-charge rates - a key reason the product is attracting broader interest.

• Broker and Market Confidence - Across the UK bridging and specialist lending sectors, a large majority of brokers expect originations and lending opportunities to expand. A recent market survey showed 72% of brokers anticipating growth, reflecting rising comfort with non-traditional finance tools. (Bridging Loan Directory).

Why We Predict 2026 Will Be a Breakthrough Year for Second Charges

• Favourable Market Conditions - The UK housing market closed out 2025 with stable fundamentals and only modest house price growth - annual increases slowed to 0.6%, the most subdued pace since spring 2024 according to Nationwide’s latest data. With forecasts pointing to steady, moderate growth in 2026, more borrowers could be looking to second charge solutions as a flexible way to unlock equity.

• Remortgage and Affordability Pressures - Mortgage lending is set for modest expansion in 2026, with gradual increases in remortgage and purchase volumes (UK Finance). For many borrowers, the end of low fixed-rate periods brings new affordability challenges - making them more cautious about refinancing and more open to second charge lending as a practical alternative.

• Stronger Infrastructure, Smoother Experience - The second charge sector continues to benefit from investment in digital platforms and streamlined underwriting processes. Lenders and brokers are now able to deliver faster, clearer outcomes for clients, while ongoing regulatory improvements are making the entire process more transparent and efficient (Grant Thornton). The result: a second charge experience that’s simpler and more reliable for property owners and advisers alike.

Conclusion

Second charge lending has transitioned from a specialist product to a respected, mainstream solution, supported by sustained market growth and increasing confidence among brokers and borrowers. Somo has been instrumental in reshaping perceptions around bridging finance, and second charge lending in particular, demonstrating its value as a responsible, accessible, and effective option for clients seeking flexible funding.

With a stable housing market, gradual shifts in the mortgage landscape, and improved industry infrastructure, 2026 is set to be the year second charge solutions take centre stage in UK property finance.

Ready to discuss a case? Get in touch:

📞 0161 312 5656

📧 brokers@somo.co.uk

Find your Regional Relationship Director today or explore our full range of bridging loan products.

FAQs

What can Second Charge Bridging Loans be used for?

Somo provides second charge bridging loans for all business purposes, this may include:

• Paying off business debts or bills
• Refurbishing properties
• Covering employee wages
• Funding new premises
• Acquiring new materials
• Launching a marketing campaign
• Upgrading systems

Key Benefits of a Second Charge Loan

• Preserve Your Existing Mortgage Deal: This is a major advantage, especially if you have a favourable interest rate or are locked into a fixed term with early repayment charges (ERCs). A second charge loan lets you avoid these penalties and keep your original terms intact.
• Access Larger Funds: Because the loan is secured against the equity in your home, you can often borrow a more significant amount than is possible with an unsecured personal loan (which is typically capped around £25,000 to £50,000 in the UK).
• Flexible Use of Funds: The borrowed capital can be used for almost any legal purpose, providing great flexibility.

Who will Somo lend a second charge bridging loan to?

• We will lend to UK business owners including:
• UK property investors
• Developers
• Limited companies
• LLPs
• Self-employed individuals
• Non-UK nationals

Why Choose Somo for Your Second Charge Bridging Loans?

• Market-Leading 70% LTV: We offer a competitive loan-to-value ratio, giving you access to the funds you need.
• Competitive Rates: We are committed to offering better rates and terms than any other second charge bridging loan offers you currently have.
• Second Charge Experts: Our expertise in second charge bridging loans allows us to provide solutions where others see only risk.