Commercial property doesn’t need a boom to create opportunity

Commercial finance presents one of the most interesting contradictions in specialist lending today.

On one hand, business confidence and demand for borrowing remain subdued. The Bank of England's Q2 Credit Conditions Survey reported declining demand for lending from both small and medium-sized businesses. Demand specifically associated with commercial real estate also fell sharply during the quarter.

Look beneath the headline, however, and something different is happening.

The latest Bayes Business School commercial real estate research shows £52.7bn of new UK Commercial Real Estate (CRE) lending was originated during 2025 – the highest level for a decade and 29% higher than the previous year.

Non-bank lenders increased new lending by 51%, while UK banks increased theirs by 29%.

Perhaps the most important statistic is what happens next.

Around £33bn of CRE is expected to mature during 2026 and require refinancing.

That represents an enormous advice opportunity.

But it isn't simply a £33bn remortgage market.

Commercial property values, debt costs and rental coverage have changed significantly since many of those facilities were originally agreed. Bayes reports that 13% of loans tested now have interest cover below 1x, while only 37% have coverage exceeding 2x. Around 60% of 2025 lending was already refinancing rather than new acquisition finance.

So the conversation with commercial borrowers needs to start much earlier.

A business owner reaching the end of a facility may discover that the lender which happily funded the property several years ago has changed appetite. The valuation may have changed. Interest cover may no longer fit. Or the borrower's wider business performance may now need greater explanation.

That doesn't necessarily make it a bad deal.

It makes it a deal requiring expertise.

There is also an interesting structural shift taking place. Outstanding CRE debt increased by only 0.8% last year to £174bn despite the significant increase in new lending. In other words, lenders are competing intensely for existing assets and refinancing opportunities rather than relying on a rapidly expanding overall market.

Development finance is another area worth watching. It represented 16% of new lending last year and 19% of outstanding CRE debt, with approximately £32bn of development lending currently outstanding.

For brokers, this creates an opportunity to broaden the client conversation.

A residential landlord may also own commercial premises. An SME director may own their trading property personally. A property investor may be considering semi-commercial assets, refurbishment or development.

Too often we wait for those customers to ask for commercial finance.

We should be asking the questions first.

Commercial lending in 2026 isn't simply about finding businesses wanting to borrow more money.

Increasingly, it is about helping existing borrowers restructure the money they already have.

And with £33bn requiring refinancing this year, that opportunity is already sitting in front of our industry.

Toby Breeden

New Business Director