A new report by UK law firm Walker Morris reveals that alternative real estate lending is rapidly gaining momentum across the United Kingdom — and tokenization could become the next major catalyst.
The survey, which covered over 100 developers and investors, shows that access to traditional bank loans has tightened due to higher interest rates and stricter credit standards. As a result, nearly 40% of respondents are now exploring “non-traditional” or “digital-asset-backed” funding structures.
While alternative lending historically referred to private funds and bridge loans, experts say tokenization is increasingly entering the discussion. Through blockchain-based platforms, real estate developers can fractionalize property loans into digital tokens — making it easier for global investors to participate in smaller-scale projects.
Analysts expect this shift to deepen in 2026, especially as regulators in the UK move closer to recognizing tokenized securities. The trend also aligns with broader investor demand for yield-bearing real-world assets (RWA) in DeFi ecosystems.
If tokenized lending matures, the UK’s property finance market could become one of Europe’s first to merge physical and digital collateral in a regulated environment.
