This was an increase of £1bn from the same time last year and the fourth highest April borrowing since records began in 1993.

The news followed the release of inflation data which saw CPI grow to 3.5% last month, a reasonably steep incline from the 2.6% recorded in March.

While the figures may cause concern for the Labour government, with chancellor Rachel Reeves previously spelling out the need to reduce borrowing over the coming years, some saw no reason to worry for the UK specialist and real estate finance markets.

“There were a number of specific reasons inflation spiked, and with energy cap set costs set to drop by 7%, inflation will soon fall back so I don’t expect it to affect policy,” said Chris Gardner, CEO at Atelier.

With base rates gradually on their way down, everyone is set to benefit from reduced borrowing costs, including the government, stated Chris.

“There is no doubt in my mind that the property market is on the move, and that has got to be good news for the specialist finance industry.”

Others such as Paresh Raja, CEO at Market Financial Solutions, thought that the latest borrowing figures could indeed have an impact on short-term market sentiment among lenders. Given the figures and April’s inflation rise, there is likely to be a renewed perception that the UK may be heading into another era of higher inflation, he said.

•   The Finance Professional Show 2024: The Video
•   Property transactions expected to soar nearly 30% by 2030
•   Conditions for SMEs on the decline since arrival of Labour government, claim 70% of brokers

However, Paresh felt the mood of the specialist finance market would move more with the decisions of the Bank of England: “The key driver of sentiment in the specialist finance sector will be how the BoE interprets and responds to these figures. It’s important to remember that we remain well below the inflation levels seen during the bank’s rate-hiking cycle.”

He noted that the BoE had anticipated some resurgence in inflation when it made base rate cuts, and Paresh felt that even April’s increase has been factored into monetary policy plans.

“Added to this is the potentially disinflationary effect of President Trump’s trade policies, which could slow global growth and provide the bank with more room to continue easing rates,” he explained.

Paresh believed that though the bank may proceed cautiously, this environment would offer assurances to borrowers and lenders.

“While the outlook remains uncertain, lenders must remain agile and continue to support brokers and borrowers.

“If rate changes are quickly reflected in lending products, the market will be better positioned to absorb short-term shocks and continue on its current growth path,” he highlighted.

Jonathan Samuels, CEO at Octane Capital, also felt the latest ONS borrowing and inflation figures would inevitably have an impact on market sentiment: “With higher borrowing costs and fiscal pressures mounting, we expect funding conditions to tighten across the specialist finance sector.

“Lenders may need to reassess risk appetite and pricing strategies, particularly in areas like bridging, development finance, and non-standard mortgages, where rate sensitivity is high.”

Jonathan anticipated that in the short term, investors and borrowers would take a more cautious stance in the face of lingering inflationary uncertainty and the growing prospect of sustained higher interest rates, meaning a need for vigilance in the specialist finance space.

“While the sector is resilient and well-versed in adapting to shifting conditions, these figures underscore the need for prudent underwriting and robust capital strategies in the months ahead."