According to a poll by Allica Bank, which collated responses from 161 commercial mortgage brokers, reasons for the rise include surging business costs, such as rent, which encouraging business owners to purchase properties rather than continue renting.
Over half, 55 per cent of brokers, said their clients were looking at 10-year fixed rates due to protect against future interest rate rises.
It added that five-year fixed rates were also more popular than two or three-year terms.
Only a small proportion, 3.5 per cent, of brokers expect the number of businesses buying commercial property to fall, and 21 per cent said they were uncertain.
Around 65 per cent of brokers said they had seen more SMEs looking to raise capital for sustainability purposes, with nearly a quarter, 23 per cent, stating they had seen a large increase in this type of capital raising.
Nearly half of brokers, 48 per cent, said clients would do this by upgrading machinery and another 35 per cent said clients were improving their current premises.
Around 19 per cent of brokers said clients were using commercial mortgage products to move premises to more sustainable properties.
Allica’s chief commercial officer Nick Baker said: “Rising interest rates and energy prices are a concern for every business owner. By taking actions such as purchasing a property, reviewing fixed-rate mortgage options, or improving energy efficiency, business can look to soften the blow, or at least have more certainty about their future business costs.
“It shows once again how vital the support of a broker can be in helping businesses find the right products to achieve these goals.”
He added that the bank wanted to give brokers the tools to support clients, pointing to its fixed rate mortgage product, rate discount for properties with an A to C Energy Performance Certificate rating and cut rates for prime mortgages.
