UK Property Development Challenges in 2025

Challenges in sourcing funding

A significant number of property developers find sourcing funding to be the most challenging aspect of their business. According to the research:

• 60% of developers agreed that obtaining funds for development has become progressively more difficult.
• 60% of developers cited difficulty in finding the right financial expertise to guide their decisions.
• 60% of developers also reported that the complexity of funding options makes it harder to secure necessary resources for their projects 

Limited funding options, especially for smaller businesses

Developers are increasingly struggling to access financing, with many concerned about the limited availability of funding options:

• 59% of developers believe the range of financial solutions available is too narrow.
• 61% of developers noted that smaller developers face even greater challenges in accessing adequate funding.
• 60% of developers feel that smaller companies are at a distinct disadvantage when obtaining financial backing.

Mainstream Lenders vs. Specialist Lenders

The research also indicates a disparity between mainstream and specialist lenders:

• 59% of developers believe mainstream lenders favour established businesses, and 60% agree that larger businesses have an easier time securing funds.
• 59% of developers also find the dedicated development finance propositions offered by specialist lenders more supportive than traditional lenders.

Previous research from Shawbrook in 2024 revealed that significant numbers of developers have been rejected from accessing funding, with over a quarter (26%) having been rejected by a mainstream lender multiple times.

Calls for Government support

To bridge the financial gap, developers are calling for more government support:

• 35% of developers are advocating for increased investment in infrastructure projects.
• 27% of developers are calling for the establishment of additional funding grants for developers to help bridge the financial gap.

Addressing the skills shortage

The skills shortage in the property development sector is another pressing concern. With ongoing talent shortages affecting the industry, developers have outlined several measures they believe the Government should take to address the issue.

• 30% of developers have called for the introduction of foreign talent to fill the gaps.
• 25% of developers want the Government to support training and upskilling initiatives to ensure a sustainable workforce in the future.

Expert commentary

Terry Woodley, Managing Director of Development Finance at Shawbrook, commented on the findings:

“Just as funding is a barrier to growth, so too is the shortage of skilled professionals. Developers will be hoping that the Government acts swiftly to attract talent and ensure developers have access to the skilled workers they need to meet the demands of a rapidly evolving market.

“Over the last five years the number of funding institutions focusing on the development sector has grown significantly.  However, due to build cost inflation and base rate rises over recent years developers have found it difficult to make schemes profitable which in turn makes it harder to secure funding. These costs are now stabilising and we have seen base rate reductions which is helping developers.  As the property development industry continues to work through recent challenges, specialist support will help to address these concerns, ensuring the continued growth and success of developers across the country. This will enable them to press on with projects, which will play a key role in meeting the Government’s 1.5 million new homes target.”

Shawbrook’s role in supporting developers

Shawbrook is committed to supporting property developers by offering:

• Tailored Development Finance: Providing bespoke financing solutions to meet the unique needs of developers.
• Expert Guidance: Offering expert advice and support throughout the development process.
• Flexible Terms: Ensuring flexible lending terms to accommodate various project requirements.

By partnering with Shawbrook, developers can access the necessary resources and support to navigate some of these funding challenges, ensuring successful project completion.

_Methodology

_{Research was conducted by Censuswide between 06.02.2025 and 24.02.2025, surveying 568 property developers aged 18+ across England, Wales, and Scotland.}