Unlock Cash Fast: How Second Charge Bridging Loans Are Helping London Property Investors Thrive
London remains one of the most competitive and resilient property markets in the world. Whether you’re a seasoned investor, a portfolio landlord, or a developer with your eye on a time-sensitive opportunity, the ability to move quickly with funding can be the difference between winning and losing a deal.
That’s why more investors are turning to a powerful yet underused financial tool: second charge bridging loans.
This guide explores how they work, why they’re booming in London, and how to determine if one is right for your next project.
What Is a Second Charge Bridging Loan?
A second charge bridging loan is a short-term finance product that allows you to borrow against the equity in a property that already has a mortgage. Unlike a traditional remortgage, this loan sits behind your first charge lender, meaning you keep your existing mortgage deal in place.
Key features include:
- Short terms: Typically 3 to 18 months
- Speed: Often funded within 3 to 10 working days
- Flexibility: Options to roll up or defer interest
- Loan sizes: Usually from £26,000 to several million, depending on equity
Second charge bridging is most commonly used by investors and developers who need fast access to capital without refinancing or selling assets.
Why Second Charge Bridging Makes Sense in London
London’s property market is uniquely positioned for second charge bridging to thrive. With high property values, strong demand, and fast-moving opportunities, investors need a funding strategy that can keep up.
1. High Property Values Offer More Leverage
London properties—especially in Zones 1–3—hold significantly more equity. For instance, a £2.5 million townhouse in Fulham with a £1.3 million mortgage still leaves over £1 million in equity. A second charge bridge at 60% LTV could release £400,000+ without touching the main mortgage.
2. Preserve Low-Interest Mortgages
Many property owners secured 1–2% mortgage deals between 2020 and 2022. With today’s rates sitting closer to 5–6%, refinancing would mean drastically higher monthly payments. Second charge bridging lets you raise funds while retaining your existing low-rate mortgage.
3. Compete in a Fast-Paced Market
In prime postcodes like Islington, Clapham, and Notting Hill, quality properties can receive offers within hours. Bridging loans enable you to move faster than buyers relying on traditional mortgages, giving you a strategic edge in a crowded market.
4. Flexibility for Developers and Investors
Whether you’re completing light refurbishments, funding a deposit for another purchase, or filling a temporary cashflow gap, second charge bridging can be structured to meet your short-term goals.
How Does a Second Charge Bridging Loan Work?
Here’s a step-by-step breakdown of the process:
Step 1: Initial Enquiry & Indicative Terms
You contact a bridging lender or broker (like Sunrise Commercial) and receive terms based on property value, equity, and your exit strategy.
Step 2: Valuation & Legal Checks
An independent valuation is ordered. Solicitors handle the title check and second charge documentation.
Step 3: Lender Offer
Once the valuation and legal review are complete, the lender issues a formal offer.
Step 4: Completion & Drawdown
Funds are transferred—often within 5–10 working days from application.
Step 5: Exit Strategy
At the end of the term, the loan is repaid through sale, refinance, or other agreed exit.
Common Uses for Second Charge Bridging in London
- Auction purchases
- Chain-breaking for onward purchases
- Portfolio expansion
- Short-term liquidity for business or investment
- Refurbishment projects prior to refinance
Case Study: £450,000 Raised in 7 Days on a Chelsea Apartment
A London-based property investor owned a two-bedroom apartment in Chelsea, valued at £1.8 million with an existing £950,000 mortgage. He needed £450,000 to close on an off-market mixed-use property in Shoreditch.
Remortgaging would take weeks and trigger early repayment penalties. Through a second charge bridging loan arranged by Sunrise Commercial, he received funds in just 7 days, preserving his 1.85% mortgage and securing the deal below market value.
Second Charge Bridging vs. Remortgaging: Key Differences
| Feature | Second Charge Bridging | Remortgage |
| Speed | 5–10 days | 4–8 weeks or more |
| Affects main mortgage | No | Yes |
| Early repayment charges | None or minimal | Likely |
| Ideal for short-term needs | Yes | No |
| Can be used for development | Yes | Rarely |
| Interest rates | Higher (short-term) | Lower (long-term) |
Risks and Considerations
While second charge bridging offers numerous advantages, it’s not without risks. Make sure to:
- Have a clear exit strategy (sale, refinance, etc.)
- Understand that defaulting can lead to repossession, even if it’s a second charge
- Budget for fees: valuation, legal, lender arrangement, and exit fees
- Avoid overleveraging—borrowing too much against property value
At Sunrise Commercial, we work closely with our clients to ensure the funding is affordable, strategic, and tailored to their investment goals.
Frequently Asked Questions (FAQs)
Is a second charge bridging loan only for residential property?
No. You can use it on residential, commercial, or mixed-use properties, as long as sufficient equity exists.
Can I use it if I have bad credit?
Yes. Many bridging lenders are more concerned with the asset and exit strategy than credit score alone.
What interest rates can I expect?
Typically 0.95%–1.5% per month, depending on LTV, property type, and risk.
Do I need to make monthly payments?
You can choose to service interest monthly, roll it up, or deduct it from the loan in advance.
What’s the maximum I can borrow?
It depends on the property and lender, but second charge bridges commonly go up to 65–70% gross combined loan-to-value (including your first mortgage).
Why Work With Sunrise Commercial?
At Sunrise Commercial, we specialise in arranging fast, bespoke second charge bridging finance for investors across Greater London and the South East. With deep knowledge of the London market and access to private lenders and specialist funds, we move quickly to structure deals that meet your needs.
We offer:
- Same-day indicative terms
- Completions in as little as 5 days
- Loans from £25K to £5M+
- Support from enquiry to exit
Our team understands the time pressures and complexities of high-value London property investments. That’s why we tailor every deal to support your goals—whether that’s closing a new acquisition, funding a project, or unlocking capital for reinvestment.
Get Started Today
If you’re looking to raise capital without touching your existing mortgage or missing out on a time-sensitive opportunity, a second charge bridging loan could be the solution.
Get in touch today to speak to one of our London bridging specialists and receive a no-obligation funding quote.
Visit: www.sunrisecommercial.co.uk
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