The bank’s latest sector pulse report analysed the past six months and found investors have gravitated towards single-asset transactions and prime, branded assets in gateway cities.

Additionally, OakNorth has seen prime yields remain broadly stable with greater softening amid secondary yields.

This normalisation reflects “an orderly recalibration of the market”, according to the bank.

Looking ahead, OakNorth has a “cautious outlook” for the hospitality market and points to fiscal tightening in the Autumn Budget as potentially limiting discretionary spending.

The bank expects gradual monetary easing and improved lender appetite to potentially prompt mild yield compression at the prime end.

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Additionally, OakNorth predicts secondary venues and late-night operators to face continued valuation pressure until fiscal clarity improves.

Ben Barbanel, chief lending officer at OakNorth, said faced with this environment there will be an onus on selective lending.

“As we move into the festive period, we’re particularly encouraged by the resilience of pubs and bars, which continue to play a vital role in their communities and remain a cornerstone of UK social life,” said Ben.

“Where many lenders have stepped back, OakNorth has remained open for business — offering flexible facilities, full lifecycle support, and deep sector expertise.

“For us, backing the right hospitality businesses now, from summer trading through to festive peaks and beyond, is key to helping the industry capture long-term value as it continues to recover and evolve.”