Bridging remains largest loan type as FRP Real Estate Advisory reports £244.7m in H1 lending
FRP Real Estate Advisory has released its latest funding report, covering lending activity across the UK real estate market for the six months to 30 June 2026. The report recorded £244.7m in funding arranged across 105 transactions, with refinancing climbing from 46% to 58% of completed deals as banks returned to the market at every level.
Key figures:
- £244.7m of lending arranged across 105 transactions in the six months to 30 June 2026
- The number of lenders used by the firm widened from 52 to 65
- Existing clients accounted for 70% of completions, up from 50% in the second half of 2025
- Residential remained the dominant asset class, rising from £127m to £133m
- Refinancing rose from 46% to 58% of deals, while purchase activity fell from 40% to 28%
- Bridging remained the largest loan type, accounting for 33.3% of deals and 32.0% of value
- Lending in the South West rose from £14m to £36.4m, the strongest regional gain of the period
That breadth of lender relationships matters in a market where very little is placed on standard terms. Balance sheet lenders spent the period increasing leverage and trimming margins, which released a great deal of refinancing business that had been sitting still. Purchase activity slowed by contrast, and the shift was vendor-led rather than buyer-led, as owners held onto assets rather than selling into a subdued sales market.
Residential lending rose from £127m to £133m, remaining by far the largest asset class, although a significant share reflects investment stock being held and refinanced onto buy-to-let facilities rather than new development. Office debt eased from £69m to £49.7m, and healthcare fell sharply from £29m to £1.2m, while lending against purpose-built student accommodation (PBSA) rose from £21m to £33.8m, driven by two prime schemes completed this year.
By loan type, bridging remained the largest single category, accounting for a third of deals (33.3%) and a third of value (32.0%). Residential mortgages made up 21.0% of deals but just 4.3% of value, reflecting a high number of smaller facilities, while development accounted for 14.3% of deals and 23.1% of value; a separate £25.8m self-build facility made up a further 10.6% of value from one transaction.
Regionally, the South West saw the strongest gains of the half, with lending rising from £14m to £36.4m. The refinancing wave shows no sign of easing. Bayes Business School estimates that £33bn of UK commercial real estate loans will mature and require refinancing in 2026, underlining why access to a broad and active lender base has become a deciding factor for borrowers to achieve optimal terms.
Andrew Robinson, partner at FRP Real Estate Advisory, said: “What has really shaped this year is the return of the banks, and they have come back at every level of the market, not just at the top. The challengers cannot always win on price, so they are winning on the journey instead, bridging a client into an asset, funding the works, and then keeping them as the relationship matures onto a term product. We placed deals with 65 lenders this half, up from 52, and almost none of it was a rate-card exercise, with every deal argued and matched to the right funder. That is exactly why clients are leaning so heavily on advisers who know the whole landscape rather than a handful of relationships, and why this has been one of the hardest markets I have worked in, but also one of the deepest, with real choice out there for those who know where to look.”
Edward Horn-Smith, partner at FRP Real Estate Advisory, added: “Liquidity is strong, and the demand to borrow is just as strong, and the real skill right now is bringing the two together and getting deals over the line. We see two clear directions of opportunity for the rest of the year: refinancing assets that are still sitting on legacy terms as balance sheet lenders offer higher LTVs, and acquisition finance for stock trading at a genuine discount. We are currently working on one office deal being bought at close to half what the vendor paid seven years ago, and that tells you more about where this market is than any single transaction usually would. Developers are not building for profit anymore; they are building to get their money back, and finding lenders willing to back that is where we are spending most of our time.”
The full FRP Real Estate Advisory January to June 2026 Funding Report can be read here.