Property buyers are turning to high-interest bridging loans to get an edge over rivals amid intense competition in the UK housing market and a continuing shortage of available homes.

The value of bridging loans, which buyers can use as cash to secure a purchase, rose 8.5% in the first three months of 2022, compared with the same period last year, according to data from 12 UK bridging loan brokers.

The Bridging Trends report found loans were most commonly used by those purchasing an investment property, historically the core market for this short-term, costly form of debt. But the next most popular reason for taking out a bridging loan was ‘funding a chain break’ - residential buyers looking to circumvent the need to sell one home before buying another.

This was the reason given in nearly a quarter of cases, up from less than one-fifth at the end of 2021. Other motives for taking out bridging loans include those paying an inheritance tax bill while waiting to sell an inherited property, or investors who want to renovate a rundown, un-mortgageable property.