What property investors should know about financing options in 2025

The property market continues to evolve in 2025. This evolution also extends to the strategies investors are using to grow their portfolios.

With high demand across rental, holiday, and commercial sectors, it’s never been more important to match investment goals with the right type of finance.

Unless you are going to live in the property, traditional residential mortgage products don’t fit the bill, and where you are building from the ground-up, you need a different financial solution completely. That’s where specialist finance comes in, tailored specifically for the investment landscape.

Tailored finance for different property goals

Each property strategy demands a different final solution. Investors cannot afford to rely on generic funding for projects to be both viable and profitable.

Here’s a breakdown of certain property goals alongside suitable financing:

• Buytolet: Requires finance which supports long-term rental income. This is done with products built around expected rental income and loan to value.

• Holiday lets: Calls for flexibility with products that accommodate high guest turnover and seasonal variation in returns.

• Commercial property:Financing designed to support rental income from business tenants, or offer owner-occupiers the opportunity to secure operational premises outright.

• Ground-up development: This demands a very different type of lending altogether. Here, finance is used to build from scratch, either to hold for long-term gains or sell for immediate profit.

It’s important to note that while you can obtain regulated refurbishment finance for personal home improvements or self-build projects where the property will be your home, that’s outside the remit of brokers who focus solely on property investment for business purposes.

When development finance makes sense

Development finance is a short-term funding solution that supports construction from the ground up. Examples of when it’s most suitable include:

• An investor already owns land and has secured planning permission to build rental properties.

• A developer is preparing to construct:

  • Residential homes to sell or rent.

  • Holiday cottages or apartments built to match visitor demand.

  • Commercial buildings to sell to business owners or to let out.

One of the key advantages of development finance is its staged structure. Funds are released in phases as the build progresses, meaning cash flow matches project milestones.

The result: more control over spending and timelines for investors.

However, working with a broker like Commercial Trust who grasps this structure is essential. That’s because development lenders usually assess applications differently based on build cost, planning consent, and the borrower’s experience.

Market conditions and investor mindset

In 2025, seasoned investors are keeping a close eye on the impact of global news on the local economy, shifting interest rates, local rental yields, and planning policy changes.

These factors play a key role in determining where, what, and when to invest – although they don’t mean opportunity has dried up.

If anything, changing market dynamics are creating new gaps to fill.

This is particularly the case in areas with housing shortages and growing tourism. Investors willing to act strategically – and partner with the right broker – can still achieve strong returns.

Conclusion

You don’t require 100% of the capital upfront to build your property portfolio.

Whether you’re developing, letting, or purchasing for commercial use, specialist finance products can support the journey.

Just be aware: your finance needs will differ depending on whether you’re purchasing, remortgaging, building from scratch, or letting out a holiday property.

With the right advice from brokerage firms like Commercial Trust, you can match your funding to your ambition.