As plans for the year ahead take shape, here’s our first update of 2026, sharing our latest insight on lending, rates and the finance market.

Market Sentiment

Following the base rate reduction just before Christmas, expectations remain that lending rates will continue to ease throughout the year. Reductions so far have been modest, but we’re already seeing a noticeably more attractive finance market developing, and this is filtering across residential, investment and commercial lending.

The buying side of the market remains busy, with mortgage and buy-to-let rates now dipping into the low 3% – 3.5% range. This is improving affordability for both homeowners and investors, encouraging refinancing activity and new purchases. And a cheaper finance market, typically supports an increase in property values, particularly for yield-based investment assets.

Property Investment

Residential Investment / HMOs

We’re delighted to be working with an increasing number of mainstream Buy-to-Let lenders, particularly supporting professional investors and larger transactions. Activity remains strong across standard Buy-to-Let and HMOs, with clients securing competitive pricing even in traditionally challenging locations such as London. Pricing across this space typically ranges from 3% to 6%, creating some very attractive refinancing opportunities.

As of last week, we’re pleased to share that Shawbrook Bank has reduced its rates by 0.5%. This is welcome news, bringing them more closely in line with the top of the market while continuing to offer strong service levels compared to some lower-cost lenders.

In the HMO market, we’ve been piloting Rely, a new lender and spin-off from Kent Reliance, operating with a refreshed lending policy. We’re seeing HMO investment valuation rates around 0.5% to 0.75% lower than much of the wider market, which has been very encouraging, both in terms of pricing and overall loan performance.

Portfolio & Commercial Investment

Portfolio lending has also seen some positive movement this month, with lenders reducing rates and refreshing product ranges to better support smaller loan sizes, not just large portfolios. Some portfolio products are now starting in the early 5% range, which is great to see.

This improvement is mirrored in the commercial investment market, where pricing is typically sitting between the late 5% and early 6% range. We’re seeing strong demand from clients looking to acquire commercial property across industrial, office and specialist sectors, with a noticeable increase in purchase activity.

Property Development

Refurbishment & Conversions

One particularly exciting area this month has been the performance of some of our more specialist development lenders. For smaller schemes (typically up to £500,000), we’re working with lenders who do not require external valuations, asset managers or monitoring. Instead, they value projects internally, allowing us to complete development loans in as little as two to three weeks!

In the larger development space, the reduction in base rate is helping to improve pricing. We’re now seeing rates in the 8.5% – 9% range at the lower end of the market, typically up to 70% of gross development value.

The refurbishment and conversion market continues to thrive, particularly within commercial-to-residential schemes. This area was historically underserved, but lender appetite has grown significantly, and we’re seeing a real increase in activity and choice for clients.

Bridging

Base rate reductions are also feeding through into the bridging market, with rates now starting from around 0.6% per month at the lower end. Speed continues to be a major driver, and lenders offering internal valuations are proving particularly popular.

We were delighted to recently complete a commercial auction purchase for an industrial scheme in Wales, part Grade II listed, which was successfully turned around in just two and a half weeks from start to finish.

In the residential bridging space, auction purchases remain busy, where again speed of funding is critical. We’re also seeing increased activity around land purchases and refinances, with facilities of up to 65% loan to value available at competitive rates.

Commercial Mortgages & Business Finance

Commercial mortgage activity remains strong, with rates now starting from around 1.5% over base. We’re also seeing pricing between high-street and specialist lenders continue to narrow, creating a very competitive environment. Infact, one of the commercial banks has recently reduced its rates by 1.5%, bringing their pricing much more in line with high-street lenders, while still being able to offer greater flexibility around lease structures, commercial investment and trading businesses.

We’re currently meeting with a number of major lenders to discuss innovation and product development, with some exciting announcements expected shortly, which should further strengthen the finance options available to our clients throughout 2026.

Get In Touch

If any of the topics listed above are of interest to you, or you simply want to contact our knowledgeable team to discuss your projects and plans, get in touch via our Contact Us page.