Stef’s market update – December 2025 – steady nerves, smart funding and room to grow in 2026

Looking back at 2025, it’s hard to ignore how much uncertainty there’s been. Costs stayed high, margins were squeezed and confidence wobbled more than once. Yet what’s stood out to me is the resilience. Our clients kept trading, funders stayed open and partners continued to back good businesses. That resilience is something I expect to carry into 2026.

Global growth is likely to remain slower and pressure on margins isn’t going away. This has been a constant theme for our clients through 2025 and I don’t see it easing any time soon. Businesses need to be honest about their numbers and make sure finance costs are built into pricing, not bolted on later as an afterthought.

Interest rates should edge down, but slowly. The days of ultra-cheap money are behind us. My view is that we’ll settle closer to the low threes by late 2026. Funding will still be available, but it needs to be planned for properly rather than assumed.

Property markets have had a tough year. Valuations dipped and activity slowed, something we’ve seen first-hand through lending decisions. That said, forecasts are more positive going forward. A modest rebound of around 4-5% is expected, helped by more competition among mortgage providers and gradual rate cuts feeding through.

Adaptability will matter more than ever. Businesses that relied on a single supplier or route to market felt real strain this year. A stronger, more flexible supply chain can make the difference between riding out disruption or being knocked off course altogether.

Like it or not, AI will play a bigger part in how businesses operate in 2026. Used well, it can support decision-making, spot trends and respond faster to customer behaviour. The growth of video and digital marketing is just one sign that data-led trading is here to stay.

From a lending point of view, I don’t expect major change. Credit quality is mixed, but lenders have stayed active. We’re seeing plenty of funding for refinances, acquisitions, new starts and restructures, alongside an increase in pre-pack activity. Good businesses with clear plans are still getting support.

As we close out the year, I want to say a genuine thank you to our clients, funders and partners for the trust and support you’ve shown Evolve. 2025 has been an incredible year for us, from winning industry awards to closing around £26m of new deals.

Have a wonderful Christmas, take the time to switch off and recharge.  Here’s to a positive and productive 2026!