Key Insights to Watch in 2025
The UK commercial finance market is changing—and 2025 is expected to bring some important developments. From more stable mortgage rates to growing rental demand and shifts in government policy, there’s a lot for businesses and investors to look forward to.
Here’s a clear look at the key commercial finance trends to watch in 2025 and what they mean for your plans.
1. A More Stable Mortgage Market
After a period of ups and downs, mortgage rates are forecast to settle in 2025. The Bank of England predicts a base rate of around 3.75% by the end of the year. Lenders are expected to continue offering fixed-rate deals but with more consistency and less risk of sharp increases.
This is good news for businesses and property investors. Stable rates make it easier to plan ahead, compare funding options, and borrow with more confidence.
2. Gradual House Price Growth with Regional Opportunity
House prices are expected to grow gradually throughout 2025. Rightmove forecasts a 4% increase in asking prices, and Knight Frank predicts even more growth leading up to 2029.
London, in particular, is set for a bounce back. As more people return to offices and international buyers re-enter the market, property values in the capital could rise faster than the national average. For commercial investors, this presents a valuable opportunity to buy or develop in key areas.
3. Rising Rental Yields and a Robust Lettings Market
Rental prices are also expected to grow by around 4% in 2025, especially in busy urban areas. This trend benefits landlords and commercial property owners looking for steady returns.
New legislation, such as the Renters’ Rights Bill, may make the rental market more structured and professional—favouring well-financed landlords and investors with high-quality property portfolios.
4. Changing Government Policy and Budget Impacts
Government focus on economic stability and infrastructure investment will influence commercial finance in 2025. Changes from the Autumn Budget Statement 2024, including updates to employer taxes and public spending, may affect inflation and interest rates.
The outlook is generally positive but cautious. Businesses seeking finance will need to plan carefully and present strong applications that show clear strategy and return potential.
Remortgaging to Dominate the Lending Landscape
Thousands of fixed-rate mortgage deals are due to end in 2025. This means remortgaging will be a major focus for borrowers and lenders alike.
Those who locked in low rates before the mini-Budget may face higher repayments, while others could benefit from slightly improved offers. Either way, it’s a chance to review finance arrangements, avoid unnecessary costs, and explore new opportunities.
How can we help?
The future of commercial finance in 2025 is one of renewed confidence, strategic growth, and greater financial stability. With clearer economic forecasts and emerging opportunities across property and rental markets, businesses and investors have much to look forward to.
At Cotterell & Cotterell Commercial Finance, we stay ahead of the trends—helping you secure the right funding at the right time. Whether you’re planning a development, acquisition, or refinance, our expert team is here to help.
