Market Sentiment as of July 2025

With summer in full swing, we’re seeing a market that’s showing both seasonal trends and structural shifts. House prices are softening slightly, which is not unusual for this time of year, but there’s also evidence that changes to stamp duty rules are beginning to influence longer-term pricing.

Interest rates remain steady, and lenders are becoming more competitive across multiple sectors, from Buy-to-Let to bridging, development, and business finance. If you’ve been waiting for a clearer picture before making your next move, this latest update could offer the perspective you need, so get in touch if you want to chat through any of it.

The overall lending environment remains positive. The 5-year swap rate (a key indicator for lender pricing) has remained stable despite political shifts, which is a strong sign for market confidence.

Although many expected a base rate reduction, with inflation currently sitting at 3%, it’s unlikely we’ll see any movement unless that figure drops further. That said, the base rate at 4.25% still compares favourably with the much higher rates we saw in recent years.

Property Investment

BTL & HMOs

Rates have become more competitive, with some lenders offering Buy-to-Let deals starting as low as 3.8%. For more complex arrangements such as Houses in Multiple Occupation (HMOs) and portfolio lending, rates are typically beginning at around 4.5%, which we see as a healthy sign for the sector.

Notably, lenders are now more willing to stretch up to 80–85% Loan-to-Value (LTV) on Buy-to-Let deals. This increased flexibility is helping drive more activity, and the HMO investment space in particular has become a hotbed of competition, especially among professional landlords who are seeking the best terms in a highly active market.

Commercial Property Investment

Semi Commercial & Commercial

We’re also seeing increased competitiveness in the commercial space, with rates continuing to trend in a borrower-friendly direction.

For semi-commercial properties, interest rates are now sitting in the late 5% range. Meanwhile, pure commercial investments are seeing rates starting from 5.92% fixed, which is highly competitive, especially for loans up to 75% LTV.

Variable rate products are also available, beginning at just 2.1% over base, making this a very attractive time for investors considering commercial opportunities. As always, commercial lending tends to come at a slightly higher cost (usually about 1–2% above residential) but the overall picture is still very positive.

Property Development

Ground-Up & Refurbishment

In development finance, we’re pleased to report that new lenders have entered the space, bringing fresh competition and broader funding opportunities.

For ground-up residential developments, we’re now seeing offers of up to 75% of Gross Development Value (GDV) and 90% Loan-to-Cost (LTC) on larger loans. This is an encouraging shift that supports ambitious projects.

The refurbishment and conversion market has also become more attractively priced. Typical monthly rates are now around 0.7%, equating to an annualised rate of approximately 9–10%, with arrangement fees averaging around 2%. Lenders in this space are typically funding up to 75% GDV, making this an active and accessible area for investors and developers alike.

Business Finance

Commercial Mortgages

The commercial mortgage market is currently being shaped heavily by base rate dynamics. We’re seeing specialist lenders (those outside the traditional high street) offering up to 75% LTV on an interest-only basis. These lenders also tend to offer more flexible affordability assessments, making them attractive for more complex borrower profiles.

High street banks are still competitive, typically pricing anywhere between 1.8–2.2% over base, and also offering up to 75% LTV. Their main advantage lies in the breadth of asset types they’re willing to consider, especially when customers can provide strong trading accounts. We’re seeing solid competition between lenders in this space, which bodes well for borrowers seeking custom solutions.

Business Loans

When it comes to business loans, government-backed schemes continue to provide much-needed support. These loans typically come in at around 2.5% over base, with terms often stretching over five years. Established startups and businesses with proven track records may secure up to 50% LTV, enabling them to access funding to fuel their next phase of growth.

Asset Finance

In asset finance, we’re seeing current rates range between 7.5% and 8.5%, with a relatively stable environment in the invoice finance market. Part of our focus at NapeX has been expanding our understanding of how various lenders approach this space, helping us tailor the best-fit solution for each client.

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.