The Building Safety Act and Gateway Delays
The Building Safety Act 2022 (BSA) has fundamentally changed the delivery of higher-risk residential developments in the UK. The BSA created the Gateway regime, which is a three-stage regulatory approval process regarding fire and structural safety in higher-risk buildings. It is a requirement that each Gateway is satisfied before the project can continue to the next Gateway:
• Gateway 1 (Planning Stage) - Developers need to submit a fire statement to ensure fire safety and use issues are set out from the start;
• Gateway 2 (Pre-Construction Stage) - Acts as a hard stop before physical construction begins. Developers must obtain building control approval from the Building Safety Regulator (BSR) by submitting detailed design specifications and safety plans; and
• Gateway 3 (Pre-Occupation Stage) - The final checkpoint upon works being completed. The BSR inspects compliance and issues a completion certificate, allowing the building to be legally registered and occupied.
Although Gateway 2 approvals were intended to be processed within 12 weeks, delays have become common, with many applications taking 25-32 weeks and some complex schemes taking considerably longer. Gateway 3 delays have also affected the ability of developers to complete sales, lettings and refinancing processes.
The Financing Challenge
Development finance facilities are typically structured around staged drawdowns. Whilst lenders will often fund land acquisition upfront, construction funding is generally only made available once key conditions precedent have been satisfied, including Gateway 2 approval for higher-risk buildings.
As a result, Gateway delays can create a funding gap between site acquisition and construction commencement. During this period, developers continue to incur interest and holding costs, whilst capital remains tied up in a non-income-producing asset. Lenders also face increased uncertainty around project timelines and exit strategies, leading to a more cautious lending environment.
Bridging Finance as a Solution
Bridging finance is short-term secured lending designed to provide liquidity where there is a temporary mismatch between a funding requirement and the availability of longer-term finance. Bridging finance has seen an increase in demand in the UK market. Data obtained from the Financial Conduct Authority (FCA) shows that the UK regulated bridging market completed 4,691 loans in 2025, with total lending reaching £1.83 billion. The average loan size was approximately £390,000. While loans of £1 million or more accounted for just 7% of transactions, they represented 34% of all lending by value. Overall lending volumes have doubled since 2021.
In the context of Gateway delays, it can provide developers with access to capital while awaiting regulatory approval.
Common structures include the following:
• Top-up bridging facilities, used to fund holding costs, professional fees and interest pending Gateway approval.
• Land bridge facilities, which finance land acquisition before being refinanced by a development facility following Gateway 2 approval.
• Hybrid structures, where bridging finance funds land acquisition and pre-construction costs until senior funding becomes available.
Benefits and Limitations
The main benefit of bridging finance is that it preserves liquidity and reduces the need for additional equity contributions, helping developers maintain project momentum during periods of delay. They are also often able to be arranged quickly allowing for borrowers to receive fast cash injections, and the full loan amount is also often released upfront.
However, bridging finance is typically more expensive than conventional development debt. Additionally, due to the short term nature of the product, it may be difficult to push back the repayment date if further delays are encountered. Lastly, not all bridging loans are regulated by the FCA. Borrowers of unregulated bridging loans cannot rely on the protections the FCA offers in cases such as where they sold an unsuitable product, or receive incorrect advice from lenders or brokers.
It does not solve the underlying issue of delayed Gateway approvals; rather, it mitigates the financial consequences of those delays. Developers must therefore balance the cost of additional debt against the alternative of injecting further equity, which may dilute returns.
Looking Ahead
Whilst recent Building Safety Regulator data suggests approval times are improving, Gateway approvals remain a key consideration for lenders, developers and investors involved in higher-risk developments.
In this environment, bridging finance is increasingly being used as a practical risk-management tool.
Although it cannot remove regulatory bottlenecks, it can provide developers with the flexibility and liquidity needed to navigate an evolving regulatory landscape and keep projects moving forward.
