Commercial mortgage applications increase by 48.5%

Latest data from Allica Bank has revealed that 48.5% of brokers have seen an increase in applications over the past six months. 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. Where applications did decrease, the reasons remain consistent with Q4 data, with 45% of brokers citing 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 data follows Allica’s launch of its new bridge-to-term proposition, aimed at giving borrowers a more certain path into long-term funding.

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, 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.”