First vs second charge bridging
The order of a charge decides who gets repaid first if a property is sold. Here is what that means, and why we lend on a first charge only.
When a lender takes security over a property, it registers a legal charge at the Land Registry. If there is more than one charge, they rank in order — first, second, and so on. That order is not a formality: it decides the sequence in which lenders are repaid from the sale proceeds.
First charge
What a first charge means
A first charge is the senior security. If the property is sold or repossessed, the first-charge lender is repaid from the proceeds before anyone else. On an unencumbered property, a new loan takes a first charge; where there is an existing mortgage, that lender usually already holds it.
Because it sits at the front of the queue, a first charge is the strongest security position a lender can hold, which is reflected in how the loan is priced and assessed.
Second charge
What a second charge means
A second charge sits behind an existing first charge. It lets a borrower raise further money against a property without disturbing the first-charge loan — but the second-charge lender is only repaid after the first-charge lender has been paid in full.
That subordinate position carries more risk. It also usually requires the first-charge lender’s consent, by way of a deed of priority, which adds parties and time to a transaction.
Our position
Why we lend on a first charge only
We lend on a first charge only. Taking the senior security position keeps the transaction clean and the security strong, which is what allows us to make quick, commercial decisions with our own capital.
In practice that means we lend where the property is unencumbered, or where our facility repays any existing borrowing so that we hold the first charge on completion. If you are looking to raise money behind an existing mortgage on a second charge, that is not something we do.
See the full lending criteria, including what we lend against and the transactions we cannot support.
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