Specialist debt and equity advisory Arc & Co. has released an annual report detailing the company’s performance for the 12 months up to 30th June 2025.
Key figures:
- Lending grew by 108% from £332m to £690m
- A total of 218 deals were completed across the business
- Lending on offices surged to £118m across 15 deals
- The amount of development funding increased by 273%
- London represents 42% of transactional activity by number of deals
The report breaks down loan activity across commercial, development, bridging, BTL, luxury asset and residential mortgage lending from 1st July 2024 to 30th June 2025.
Asset types are reflected as a proportion of overall lending, with residential topping the graph at 35%, but down from 48% in 2023/4.
Hotel and serviced apartments as well as office activity rose significantly for the period, and PBSA came in at 9% compared to the previous year when no deals of this kind were completed.
The growth of BTL lending was fuelled by developers becoming accidental landlords and rental yield growth improving refinancing options.
The changing appetite of the banks is driving the uptick in commercial lending—which increased by 110% in terms of loan volume—with products and rates markedly improved YoY.
Developers pivoting to the operating living sector has boosted development figures, as well as pressure on landowners to build out to realise their equity.
Andrew Robinson, Arc & Co. CEO comments:
“We have experienced exceptional YoY growth at Arc & Co., with the total amount of lending arranged more than doubling from £332m to £690m. The number of deals and average deal size increased significantly, reflecting a more confident market.
“Shifting dynamics saw significant changes in commercial and development lending activity.
“Development finance almost tripled over the year, largely driven by operational living sectors — such as purpose-built student accommodation (PBSA), co-living, and senior living — rather than traditional build-to-sell schemes, which have struggled amid a cooling residential sales market and the introduction of legislation such as the Building Safety Act.”
Edward Horn-Smith, Managing Director, states:
“Over the past year, one of the most striking trends was the sharp increase in available liquidity: within commercial funding, some banks raised maximum LTVs from around 50% to as high as 75%, driven by stronger balance sheets and the need to deploy surplus deposits.
“We expect banks will continue to ramp up the deployment of capital by offering higher LTVs, relaxing ICRs, and reviewing loan covenants to encourage borrowing. This will result in private funds seeking alternative routes to market.
“Arc & Co.'s success has been grounded in strong team execution, technology adoption, and the ability to handle complex, multi-layered transactions. As banks continue to ease lending restrictions — including recently scrapped caps on high-LTV exposures — the market outlook remains promising but demands careful navigation to manage valuation risks, evolving investor sentiment, and macro-level uncertainties.”
