Why more SMEs are buying the premises they used to rent

Over recent months, we’ve seen a noticeable uptick in enquiries from small and medium-sized businesses (SME’s) looking to purchase the buildings they currently lease. While not a new idea, the appetite for ownership appears to be growing, and the reasons behind it are fairly straightforward.

The Economy remains unpredictable

Although UK GDP grew by 0.7% in the first quarter of 2025, the economy remains unpredictable. Monthly figures from the Office for National Statistics (ONS), published in June 2025, showed a 0.3% contraction in April, which is the largest monthly drop since October 2023, driven mainly by a 0.4% fall in services output¹. It reflects the broader uncertainty many SMEs are dealing with, with global trade disruption, business tax changes, and cautious consumer spending all playing a part. Against this backdrop, it’s not surprising that some business owners are re-evaluating their long-term cost base and seeking more control over fixed overheads.

Premises costs are a natural place to start. In recent months, more landlords have been looking to sell, and tenants are increasingly being offered first refusal. In the past, many SMEs may not have had the means or confidence to proceed. But now, with rent pressures mounting and a clearer financial case for ownership, that’s beginning to change.

For many, the financial logic is becoming clearer. Mortgage repayments are often comparable to, or in some cases lower than, commercial rents. Ownership also offers a fixed cost over time, compared to leases which may include upward-only reviews or unplanned renewal terms. More importantly, the property becomes a company asset, thus supporting balance sheet strength, longer-term investment, or succession planning.

There’s also the current interest rate environment to consider. The Bank of England held its base rate at 4.25% in June 2025, but signalled that rate cuts are likely later this year². For SMEs, this may present an opportunity to secure longer-term fixed borrowing while rates are still comparatively high. With both core and services inflation falling in May³, the direction of travel is becoming more favourable.

Access to finance, however, remains a key consideration. Mainstream lenders tend to focus on stable, conventional cases, such as businesses with long trading histories, straightforward income, and standard property types. But that’s not the full picture. Many SMEs are newer, niche, or simply do not meet all the traditional requirements. And when a landlord decides to sell, the window to act is often quite narrow.

SME Owners need lending certainty

At Alternative Bridging Corporation, we work with these businesses to secure funding quickly and flexibly. Where timing is essential, we offer bridging loans that give clients the certainty to proceed with a purchase. Once ownership is established and trading continues as expected, we help them refinance onto a term loan that supports their long-term strategy.

This kind of transition isn’t suitable for every business. But for the right client, in the right circumstances, it can be a transformative decision. What’s often missing is awareness. Many SME owners don’t realise this option is available to them, or assume that buying their premises is too complex or out of reach. Brokers can play a crucial role, by identifying suitable cases, exploring lender options, and opening up new conversations about long-term strategy.

In a cautious and uneven economic climate, certainty is valuable. Buying a premises won’t fix every challenge, but it can offer long-term stability, equity, and freedom at a time when flexibility matters more than ever.

As with housing, commercial property ownership among SMEs often comes down to access. Access to finance, access to opportunity, and access to the right support. When all three align, the outcomes are usually stronger, more sustainable, and more secure.

To discuss the specific details of your next bridging or term loan case, please call us to speak to one of our experts on 0208 349 5190.

Read the full article from Jonathan Rubins, CCO at Alternative Bridging Corporation in Bridging & Commercial.

Sources

¹ Office for National Statistics, GDP monthly estimate, UK: April 2025, published June 2025 – https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/april2025

2 Bank of England, Monetary Policy Committee decision – 19 June 2025, published June 2025 – https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2025/june-2025

3 Office for National Statistics, Consumer price inflation, UK: May 2025, published June 2025 – https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/may2025

⁴ Office for National Statistics, Consumer price inflation, UK: May 2025, published June 2025. https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/may2025