The UK’s commercial property sector is seeing a renewed wave of alternative financing as non-bank lenders step into the gap left by traditional banks. According to a November 2025 report by Walker Morris, private credit funds and alternative debt providers now account for nearly half of new commercial real-estate loans — a sharp rise from just 20 % five years ago.
Developers are increasingly turning to these lenders for refinancing and new development capital, especially as base rates remain high and conventional banks stay risk-averse. This alternative-lending boom is reshaping the market, bringing in flexible terms but also higher yields for investors seeking diversification.
For alternative-investment managers, property-backed credit is emerging as a stable income generator amid volatile equity and crypto markets. Yet, the rising cost of capital may also limit speculative real-estate plays.
When institutional capital finds attractive returns in real assets, inflows into digital assets may slow. However, tokenization of property loans could bridge both markets, creating new DeFi-style opportunities in real estate.
