Commercial mortgage brokers reported steady demand and rising refinancing activity in the second half of 2025, with optimism remaining resilient heading into 2026, according to new research from Allica Bank.
The challenger bank surveyed 580 commercial mortgage and bridging finance brokers, with the findings pointing to a market supported by property purchases, refinancing activity and growing confidence among established businesses.
Nearly 40% of commercial mortgage brokers said they saw an increase in applications during the second half of 2025, while a further 30% reported that volumes remained stable despite what many described as a challenging economic environment.
Businesses purchasing their own premises accounted for the largest share of increased demand, cited by 44% of brokers. Refinancing was also a major driver as firms sought to benefit from easing interest rates.
More than a quarter of brokers reporting growth said it was linked to clients raising finance to fund new investment, which the survey suggested may signal a gradual return in confidence among established firms.
Borrowing motivations also shifted towards longer-term investment. The proportion of businesses borrowing simply to support day-to-day operations fell from 22% in late 2024 to 6%, while applications to raise capital held steady at 33%.
Refinancing activity increased further as fixed-rate terms matured, with 56% of brokers reporting higher levels of refinancing enquiries as pricing became more competitive.
For brokers who reported a decline in applications, the reasons were largely familiar. Rising costs and continued uncertainty around interest rates were commonly cited, alongside the impact of fiscal changes announced in the Chancellor’s Budget, including higher employers’ National Insurance contributions.
The survey was conducted in the weeks immediately following the Budget, with some brokers describing a temporary pause as businesses assessed the potential implications for investment and borrowing plans.
REFURBISHMENT ACTIVITY BOOSTS BRIDGING DEMAND
Demand for bridging finance also strengthened over the period. Some 55% of brokers said they had seen an increase in applications linked to light and medium refurbishment projects, up from 45% in the first half of 2025.
The data suggests that investors continue to rely on short-term finance to fund property upgrades and reposition assets before moving onto longer-term funding solutions.
BROKER CONFIDENCE REMAINS RESILIENT
Looking ahead to the next six to 12 months, 39% of commercial mortgage brokers said they were optimistic about the outlook for the market, while fewer than a quarter said they felt concerned about conditions.
Confidence was stronger among bridging finance brokers, with 55% reporting a positive outlook and only 15% expressing concern.
Property investment was identified as the sector most likely to see growth over the coming year, selected by 55% of brokers. Care homes and construction followed, each cited by 34% of respondents.
TECHNOLOGY IMPROVING BROKER EFFICIENCY
The survey also highlighted the growing influence of technology across the commercial lending market.
More than half of commercial mortgage brokers said technology had improved the speed and efficiency of both commercial mortgage and bridging transactions, with digital underwriting, automated valuations and AI-led processes helping to streamline case handling.
Charissa Chang, head of broker sales for the north and midlands at Allica Bank, said: “What really stands out from this survey is that brokers are still feeling confident going into 2026.
“Even at a time marked by uncertainty, brokers are seeing steady demand, with strong appetite in sectors like property, care homes and construction.
“This reflects the resilience and ambition of the established businesses that brokers support. Many continue to invest, refinance, and plan for the future, relying on brokers’ expertise to guide them, and that’s a positive signal for the year ahead.
“As rates ease and businesses adapt, we expect confidence to strengthen further. There is real momentum in the market, and it’s now down to banks like Allica to match that ambition, by providing the clarity, consistency and communication that brokers and their clients rely on.”
