Appetite for debt finance in the UK is on the rise, with a third (32%) of businesses stating their desire to borrow has grown in the current economic climate. Meanwhile, seven in ten (70%) respondents expressed a stronger interest in UK investment opportunities in the coming 6-12 months.
This is according to new research by specialist property lender, ASK Partners (ASK) and OakNorth, the digital bank for entrepreneurs, by entrepreneurs, signalling a robust outlook for the UK debt market in 2025.
The research revealed that just under three quarters (71%) of businesses surveyed are considering debt finance in the next 12 months, with diverse approaches to structuring their financing. Three in ten (29%) plan to incorporate junior debt into their financial structures while a quarter are opting for a mix of equity and junior debt.
Just under a fifth (18%) intend to increase equity to manage rising debt costs. When applying for a business loan, respondents highlighted that pricing, flexibility in the loan terms, and speed of execution were all of importance.
Daniel Austin, CEO and co-founder at ASK Partners, “These results are a really 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. Debt finance providers with these skills will play a key role in reshaping UK real estate in 2025, helping developers and investors capitalise on opportunities in this evolving landscape."
