The US v UK bridging finance markets

This is an article by Christian Faes, for Interpath’s UK Bridging Market Survey

I've built bridging finance businesses in both the UK and the US markets. As with most people who come to the US market, you can find the sheer size of it intoxicating - and it’s been a truly fascinating journey building a business here.

Size

If you want a clean way to compare the size of the opportunity for bridging finance in the two markets, one of the best starting points is the data around “house flipping” - i.e., homes bought and sold within 12 months. 

In the UK, Hamptons recently put out a report saying that in England and Wales there were 10,570 homes that were “flipped” in 2025, and that flipping accounted for 1.5% of all housing transactions.

In the US, the number of homes that were flipped in 2025 was 297,045 according to data company ATTOM. That means the US “flipping” opportunity set (again, as a proxy for short-term transactional lending) was about 28x that of the UK. And flipping represented 7.4% of all US home sales in the year.

It’s a bigger percentage of total transactions in the US than the UK - which I suspect is partly because there’s less friction in the system. Stamp duty isn’t really a thing here in the way it is in the UK, and fewer transaction taxes generally means more movement, more liquidity, and more deal flow.

Now, I appreciate there are different figures floating around for ‘the size of the UK bridging market’ depending on where you take your data from. In the US data for the size of the bridging market can be constructed from title data that is compiled by ATTOM. From their data you get a total bridging finance volume for the US market in 2025 that is roughly $29 billion.

Competition

So it’s probably no surprise to anyone that the US market is a behemoth. What did surprise me is just how ultra-competitive it is.

I remember being involved with the Association of Short Term Lenders back in the day, and there were claims then that there were over 100 bridging lenders in the UK market. I remember thinking that was a lot.

Well, in the US, the American Association of Private Lenders has published data showing that in 2024 there were 10,136 unique private lenders that originated a bridging loan. The largest lender in the market does less than $1 billion a year in bridging origination. The market is huge, but it’s also incredibly fragmented.

And it’s not just the number of lenders. It’s the information environment that we operate in here. Unencumbered by regulations like GDPR, data in the US is widely available - and that adds fuel to the competitive fire. There are two tech platforms that have been built specifically for the bridging market here, and they allow you to plug in a lender’s name and see not only every loan they’ve done, but it will serve you the borrower’s contact details. There is no proprietary secrets around who’s doing what sort of volume, nor who their borrowers are.

Liquidity and institutionalization

In the UK, a lot of bridging lenders are, at their core, credit businesses. They originate loans and hold meaningful risk (even if the capital behind them is institutional).

In the US, a large chunk of the market operates an originate and distribute model, where they don’t hold the credit risk for long - and sometimes they don’t really hold it at all. Loans are warehoused briefly and then sold to aggregators or other institutions, or the loan is effectively funded by an institution from day one. Which is why you meet so many US “lenders” who are insanely good at marketing and origination, and seemingly much less interested in being long-term risk holders. They’re built for volume.

And while the asset class has institutionalized on both sides of the Atlantic over the last decade or so, the US has taken things further. There have been securitizations for bridging finance since 2016; and in 2024, we saw the first public rated securitization in the US market from Toorak. This has seen other similar rated transactions follow, and with it even more capital and a wider universe of investor come into the asset class.

The 50-state issue (and why the legal framework changes the feel of the product)

An interesting structural difference between the UK and the US is simply that the US is made up of 50 states, and each state has its own regulatory and legal framework you have to navigate. 

The states largely break down as judicial or non-judicial foreclosure states. And if it’s a non-judicial foreclosure state, you don’t need to sue the borrower to take ownership of the property - you can follow a statutory process and serve notice (with lots of state-by-state nuance).

And then there’s the part that genuinely shocked me - as it does a lot of offshore investors that I talk with. In a foreclosure scenario in the US (it varies by state, and I’m generalizing but), the borrower’s equity can effectively get wiped out. That is, there is no requirement for a lender to obtain ‘the best price reasonably obtainable’ like in the UK. In simple terms: once a foreclosure sale date is set, the lender can ‘bid’ the debt amount. If no one else turns up to the courthouse steps with the ability to transact with cash on the day (yes, for real), the property will revert to the lender at the par loan amount.

If the lender later sells the property for more than the loan amount, that upside will go to the lender. This could create a whole universe of unscrupulous lenders with a ‘loan to own’ business model. However, the reality is that I think it derisks the asset class quite substantially, because it creates a significant incentive on the borrower to refinance or sell an asset rather than letting their equity get wiped out.

Final thought

The sales sophistication we’ve had to build in the US to get traction is unlike anything I’ve seen before. And I don’t mean that as bravado - I mean it as a warning for anyone looking at the market with interest. The US bridging ecosystem is massive, highly liquid, institutionally plugged-in, but it is also extremely competitive.

Christian Faes, co-founder of LendInvest, and now based in the US building investment firm Faes & Co and bridging platform F2 Finance.