May 2026 - UK Lending Market

UK debenture registrations rose 19% year on year in May 2026 to 12,185, a wider gain than April's 14%, but the growth remained a buy-to-let story rather than a broad lending recovery. Property specialists (+24%) and High Street banks (+31%) again drove the total, both reflecting a market-wide surge in limited-company buy-to-let, while most SME and commercial lending stayed soft.

In May 2026 the two cohorts driving the total were the same as in April. UK property specialists rose 24% to 6,851, the single largest contributor, and High Street banks rose 31% to 2,557. The bulk of the High Street rise again came from Lloyds, up 112% in the month and far ahead of the other major banks. Lloyds' figures capture a large share of the group's buy-to-let lending, so its lift reflects buy-to-let rather than mainstream commercial lending, and the scale of it points to continued portfolio incorporation activity rather than genuinely new commercial credit.

This buy-to-let surge is market-wide and builds from the autumn of 2025, appearing across the specialist buy-to-let lenders rather than at Lloyds alone. Record numbers of landlords have been incorporating, moving portfolios into limited companies for tax reasons - a shift the Autumn 2025 Budget reinforced by raising property income tax on individual landlords from April 2027 while leaving companies unaffected - alongside a refinancing wave as fixed-rate deals mature and mortgage rates fall.

Away from buy-to-let, demand stayed subdued. In May 2026 most UK SME working-capital and specialist lending was soft: asset finance (-17%), large structured lending (-30%) and R&D finance (-17%). UK trade finance fell 81%, in keeping with continued disruption to global goods movement, though at eight registrations the base is far too small to read. The one exception was SME loan providers, up 98%, which may reflect businesses reaching for faster, unsecured working capital as the Iran war and held base rate continued to dampen investment appetite.

The read for May 2026 is that headline strength is a buy-to-let incorporation and refinancing story, much of it re-registration of existing stock rather than new lending, while underlying commercial and SME demand has yet to recover. Year to date the grand total is up 15%, carried by buy-to-let driven High Street (+34%) and property (+17%) volumes, while Other banks are down 15% and trade finance down 66%.