UK debt market set to surge in 2025

Demand for debt finance in the UK is growing, with 32% of businesses reporting an increased desire to borrow, despite the current economic conditions. According to research by property lenders ASK Partners and OakNorth, 70% of respondents have shown a heightened interest in UK investment opportunities over the next 6-12 months, Nearly 71% of businesses surveyed are considering debt finance over the next 12 months, with varying strategies for structuring their funding. Around 29% plan to include junior debt in their financial structures, while 25% are choosing a combination of equity and junior debt. Additionally,18% plan to raise equity to cope with increasing debt costs. When securing a business loan, respondents focussed on factors like pricing, loan term flexibility, and fast execution. Daniel Austin, chief executive officer and co-founder at ASK Partners, said: “These results are a positive sign for economic growth. The Autumn Budget was generally not well received by businesses given the rises in employment costs, but these figures prove that it has not dampened appetite for borrowing and investment. “From a real estate perspective, this reflects the compelling opportunities in the UK market. The 2025 market is poised for diverse prospects, particularly in growth sectors such as build-to-rent, co-living, student housing, hotels, and offices, all supported by robust demand. “However, challenges, such as tax increases, inflation, and tighter environmental regulations, persist. Navigating these headwinds will require innovative financing and deep market insight.” Image © Source/REX/Shutterstock