I'm downsizing into my daughter's garden, but what if my house won't sell?
Downsizing from a big house to a lodge in your daughter's garden is a commendable plan. It could offer you greater financial freedom, fewer maintenance demands and a closer connection with your family. As with any property move, though, timing the sale of your current home to align with your plans can be difficult — especially in a slow market.
A bridging loan could be helpful, but it's essential to understand exactly what it involves. It is a short-term loan designed to bridge the gap between selling your property and buying or building a new one.
While it may sound straightforward, bridging finance is a specialist area with its own risks and requirements. This is because lenders assess these loans differently from standard mortgages. In doing so, they focus heavily on your exit strategy (how and when you'll repay the loan), along with the value of your property and your overall financial profile. Typically, regulated bridging loans must be repaid within 12 months.
You're right that high street and mainstream banks can be reluctant to offer short-term loans. Bridging finance carries higher risks for them and often requires more bespoke underwriting. For this reason it's usually provided by specialist lenders or via mortgage brokers with access to niche markets.
Lenders can be more flexible in some areas, but this comes at a cost. Bridging loan interest rates are usually higher and there are often set-up fees and legal costs to factor in. All of this can significantly increase the cost of borrowing.
If your home is slow to sell and you're considering a bridging loan, it's wise to speak with a mortgage broker who specialises in this field — they have the best access to suitable lenders and can compare terms and costs.
Your exit strategy will be key. Most lenders want to see a clear plan (typically the sale of your home) and a realistic timeframe for repayment. If the sale is delayed, you could face pressure to repay or incur penalties.
As mentioned, bridging loans come with higher interest rates, usually charged monthly. There are often arrangement fees (typically 1–2 per cent of the loan amount), legal and valuation costs, and a high monthly interest rate compared with a standard mortgage. These can add up quickly, so make sure you understand the full cost before committing.
A bridging loan may not be your only option here. You could negotiate a delayed payment with your lodge builder or draw on other financial resources such as savings, investments or family support.
It's also worth speaking with local estate agents to get a realistic view of your sale timeline and price. If your property is likely to sell soon, you may be able to avoid borrowing altogether.
Bridging loans can be beneficial in situations like yours, but they also carry risk. Good advice, clear planning and a realistic view of your property's sale prospects will help to ensure the financial risk fits with your comfort level and ultimate goals.
Adrian Anderson is the founder and managing director of Anderson Harris and has been a mortgage broker for more than 20 years
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