There are a number of key trends that I expect to see play out in the real estate lending market in 2026. Private credit will continue to draw significant interest from equity investors seeking more predictable, risk-adjusted returns. This trend will bolster liquidity for senior and whole loan financing in the UK real estate market. 

At the same time, senior leadership engagement is emerging as a critical factor in lender selection, with borrowers increasingly prioritising direct access to experienced decision-makers over complex, layered credit processes.

Over 2026, borrowers should look beyond headline rates and pay closer attention to ancillary loan terms. Features such as extension options, staged covenants and tailored drawdown mechanics can make facilities more flexible and cost-effective. Lenders that position themselves as strategic partners rather than mere capital providers will gain greater traction, offering borrowers valuable introductions, market insight and broader network support.

Specifically in the UK, the structural housing shortage will remain a defining tailwind for living-sector lending, even as interest rates evolve. In 2026, the capital behind a lender will matter more than ever. More flexible, aligned investor bases will enable lenders to structure facilities around real business plans while safeguarding investors and avoiding overly rigid lending frameworks that can undermine projects.

As the UK market adapts to the gateway environment, transaction timelines will become more manageable, supporting a steadier flow of new deals. We expect banks to continue the trend of providing back-leverage to UK real estate lenders, allowing them to achieve diversified, cross-collateralised exposure without building large internal teams, while benefiting from borrower equity and junior capital as natural credit enhancement.

Borrowers are increasingly favouring lenders with deep, specialised development finance experience and that will continue to be the case in 2026. Seasoned lending teams understand that delays, contractor challenges and uneven cashflows are often part of project delivery and not always reasons for alarm. Conversely, the influx of less experienced development capital has led to premature defaults, damaging schemes, eroding value and creating unnecessary borrower distress.

Finally, brokers are playing an ever more important role in guiding borrowers through a lending landscape that is broader and more complex than ever before. That trend will undoubtedly continue.