48.5% of brokers have seen an increase in commercial mortgage applications over the past six months, new research from Allica Bank shows.
That’s up from 40% in Q4 2024, and comes despite a period marred by global uncertainty, trade tensions, high costs, and the introduction of higher employer National Insurance contributions.
Only 20.3% of brokers reported a decrease in applications, while nearly a third (31%) said volumes remained mostly unchanged.
45% of brokers cited rising costs as the main barrier to borrowing, closely followed by a continued sense of caution around rate movements.
With 43% of brokers citing no major change in the reasons for borrowing, refinancing and investment purchases remain the most common. 45% of brokers reported a rise in the number of businesses looking to purchase their own premises - a sure sign that long-term stability remains a priority for established businesses.
In bridging finance, brokers reported a strong appetite for growth, with 45% reporting a rise in investments, 44% in refurbishment, and 37% in development projects.
The survey paints a positive picture of where the commercial mortgage sector is heading over the next six months - a dramatic turnaround from Q4, which showed that 51% of brokers were concerned about growth for 2025.
Charissa Chang, head of broker sales for the North and Midlands at Allica Bank, said: “After a tough period, this is a sign that SME confidence is starting to return. Businesses are making decisions again, and we’re seeing more clients looking to secure their premises and invest in their long-term future, which is exactly where the market needs to be heading.
“It’s also a clear sign of resilience. Allica’s recent SME Lending Gap report revealed that the UK has some of the lowest rates of business investment in the G7 - but SMEs are still planning, still borrowing, and still investing, and that says a lot about their mindset, and the role brokers play in helping them move forward.
“Overall, the findings suggest a more positive outlook than what might be expected, and while challenges remain, the direction of travel is encouraging. Businesses are taking proactive steps, and brokers are at the centre of that momentum, which Allica will continue to support through our ongoing investment in technology and the relationship-led business banking that brokers and their clients still value.”
Brian Love, commercial finance director at Sedulo Funding, added: “We’ve definitely noticed a shift over the past few months as clients who were sitting tight are starting to re-engage, and while there’s still a level of caution, there’s also a stronger sense of wanting to plan ahead. What makes the difference now is working with lenders who can move at pace, but also take the time to understand each deal individually. Working with banks like Allica, who recognise that, is a breath of fresh air and vital to the success of our clients.”
