Upcoming Rate Cuts? What the Next Monetary Shift Means for UK Property & Business Finance
- Kelly Moody
- 3 days ago
- 3 min read
As we approach what could be a turning point for UK borrowing costs, the signals from the Bank of England suggest that base-rates may begin to fall in early 2026, potentially the first decline since 2021. For both property investors and business owners seeking funding, this shift presents a meaningful moment to rethink strategy, line up finance and position for the next phase.
Why this matters for property investors
Interest rates have remained elevated (above 5%) since August 2023, a factor that cooled buyer demand and suppressed transaction volumes. Meanwhile property values held up more robustly than many expected, particularly in regional markets. A lower-rate regime promises improved affordability, potentially unlocking momentum for purchasers, landlords and refinancing borrowers alike.
Lower borrowing costs tend to ease pressure on debt servicing, widen margin for leveraged investment and boost confidence. Historically, periods of rate cuts are followed around six to nine months later by upward pressure on values. For investors, the message is clear: early positioning can help lock in favourable finance ahead of competitive pressures.
What this means for business finance
While the headline focus often falls on residential & buy-to-let property, the same rate environment impacts business borrowers. Lower base rates typically filter through to commercial lending, asset finance and working-capital facilities.
For growth-seeking enterprises or property companies planning expansion, now is a good moment to explore options. Approved Finance Group specialises in business finance as well as property-lend: whether you’re scaling a property portfolio, acquiring commercial assets, or freeing up capital for growth, our tailored solutions can help.
Regional yield vs London stability
Recent reports suggest that the North West (Manchester, Liverpool) is highlighted for yields in the 6-7% range, significantly higher than many capital-market averages. Meanwhile London remains a strong barometer of market sentiment: modest price rises but rental demand surging, pushing yields to their strongest in a decade.
For investors, a hybrid approach is emerging: high-yield regional assets paired with London holdings to anchor long-term value. At Approved Finance Group we advise on structuring finance that supports this kind of blended portfolio.
Capital flows, global sentiment & refinancing opportunities
The article also points to potential inflows of overseas capital as rate cuts approach and sterling remains weak relative to major currencies. For UK-based investors this means increased competition in some segments but also opportunity in others, especially where lending terms are secure and tailored.
For those with existing debt, falling rates provide a chance to refinance, reduce cost of capital and enhance cash-flow a core part of our service offering at Approved Finance Group, especially for clients with leveraged property or commercial asset portfolios.
Key strategy pointers for the remainder of 2025 and into 2026
Review your borrowing structure now: consider whether fixed or variable debt suits your strategy in a falling-rate environment.
Lock in finance where possible: by arranging agreed offers in advance, you may benefit before broader competition intensifies.
Consider diversification: yield-rich regional assets may outperform in 2026, while London provides access to liquidity and long-term capital growth.
For businesses and property companies: assess growth plans, refinance existing debt and explore asset-backed funding ahead of rate-cuts.
Partner with a specialist broker: working with a team such as Approved Finance Group ensures you can navigate both property-finance and business-finance options efficiently.
Kelly Moody, Senior Property Finance Broker at Approved Finance Group comments:
“With the Bank of England signalling a potential shift in monetary policy, investors and business-owners should act now rather than wait. Whether it’s refinance of an existing asset or gearing up for expansion, securing finance ahead of a broader response in the market will be a major advantage. At Approved Finance Group we’re ready to tailor solutions across property and business funding to capture this window of opportunity.”
Final take
The next phase of the UK market is likely not about rapid growth as seen earlier in the decade but about steady, income-and-growth balanced returns combined with favourable borrowing cost dynamics. As rate cuts approach, liquidity and confidence will improve but timing, preparedness and the right finance structure will be what separates the winners.
At Approved Finance Group, we specialise in helping clients access the right property-finance and business-finance solutions to respond to these changing conditions. If you’re exploring acquisition, refinance or scale-up, now is a prime moment to engage.
