Refinancing accounted for 58% of property finance deals arranged by FRP Real Estate Advisory in the first half of 2026 as banks increased their activity across the market.
The advisory firm arranged £244.7 million of lending across 105 transactions in the six months to 30 June, according to its latest funding report.
Refinancing rose from 46% of completed deals in the second half of 2025 to 58%, while the proportion involving purchases fell from 40% to 28%. FRP said the shift was driven by owners retaining assets rather than selling into a subdued market.
The number of lenders used by the firm increased from 52 to 65 as balance sheet lenders offered higher leverage and reduced margins. Existing clients represented 70% of completions, compared with 50% in the previous six-month period.
Residential property remained the largest asset class, with lending increasing from £127 million to £133 million. FRP said a significant proportion related to investment properties being retained and refinanced through buy-to-let facilities rather than new development.
Office lending declined from £69 million to £49.7 million, while healthcare lending fell from £29 million to £1.2 million. Finance secured against purpose-built student accommodation increased from £21 million to £33.8 million, supported by two prime schemes completed during the period.
Bridging was the largest loan category, representing 33.3% of transactions and 32% of total value. Residential mortgages accounted for 21% of deals but 4.3% of value, reflecting the smaller size of the facilities.
Development finance made up 14.3% of transactions and 23.1% of value. A separate £25.8 million self-build facility represented a further 10.6% of the total value from a single deal.
The South West recorded the strongest regional increase, with lending rising from £14 million to £36.4 million.
Bayes Business School has estimated that £33 billion of UK commercial property loans will mature and require refinancing during 2026.
Andrew Robinson, partner at FRP Real Estate Advisory, says: “What has really shaped this year is the return of the banks, and they have come back at every level of the market, not just at the top.
“The challengers cannot always win on price, so they are winning on the journey instead, bridging a client into an asset, funding the works, and then keeping them as the relationship matures onto a term product.
“We placed deals with 65 lenders this half, up from 52, and almost none of it was a rate-card exercise, with every deal argued and matched to the right funder.
“That is exactly why clients are leaning so heavily on advisers who know the whole landscape rather than a handful of relationships, and why this has been one of the hardest markets I have worked in, but also one of the deepest, with real choice out there for those who know where to look.”
Edward Horn-Smith, partner at FRP Real Estate Advisory, added: “Liquidity is strong, and the demand to borrow is just as strong, and the real skill right now is bringing the two together and getting deals over the line.
“We see two clear directions of opportunity for the rest of the year: refinancing assets that are still sitting on legacy terms as balance sheet lenders offer higher LTVs, and acquisition finance for stock trading at a genuine discount.
“We are currently working on one office deal being bought at close to half what the vendor paid seven years ago, and that tells you more about where this market is than any single transaction usually would.
“Developers are not building for profit anymore; they are building to get their money back, and finding lenders willing to back that is where we are spending most of our time.”
