New data from the National Association of Commercial Finance Brokers has revealed that small businesses seem to have shrugged off Brexit-related uncertainty as business mortgage enquiries in October have more than doubled on the same period last year.
According to the report, 64% of all commercial mortgage enquiries in October – from the likes of high street retailers to restaurants and pubs – came from businesses based in London.
Business mortgage enquiries – which provide a good barometer of small businesses’ long-term financial appetite – also increased substantially on the month, up by three-quarters (75%) compared to September 2016.
Applicants came from a range of businesses such as restaurants, bars and other consumer-facing enterprises, in what could be seen as a renewed vote of confidence for the high street.
Regionally, small businesses in London powered the growth with nearly two thirds of enquiries (64%) coming from the capital – more than six times the value of enquiries from the region with the second biggest appetite for finance, the Midlands (9%).
This uplift in commercial mortgage enquiries follows the NACFB’s annual results from earlier this year, which revealed that £5.2bn of commercial mortgage business was written in the year ending 30th June 2016, up by more than half (55%) on the previous year - and the second strongest area of growth for NACFB’s members after bridging finance.
Paul Goodman, chairman of the NACFB, comments: “Appetite for commercial mortgage finance is a good indicator of small business confidence as it shows firms are confident enough to commit to the long term. Last month we saw a huge uplift in enquiries from a variety of businesses – ranging from publicans and smaller retailers to hairdressers and restaurants – so it’s starting to feel like the SME community has got over any Brexit-related nerves.
While some of those businesses will also be looking to avoid steep commercial rents, especially in the capital, the confidence to take out a commercial mortgage bodes well for the future.”