The development finance challenge facing property developers
Four out of five property developers find sourcing development finance the most difficult aspect of their business. Find out more about the funding challenges faced by property developers and how a specialist lender can help.
At a glance
Property developers have pointed to funding as their key concern according to new research from Shawbrook. Four in five (77%) of developers said that finding funding was the most complicated aspect of their business, with three quarters (75%) saying there are limited funding options for developers.
Significant numbers of developers have been rejected from accessing funding, with over a quarter (26%) having been rejected by a mainstream lender multiple times.
The conception of a business appears to be the hardest stage to secure funding, with four in five (80%) of developers stating that it was particularly difficult to find funding when they were starting their business. This is followed closely by 74% of developers who felt that it was harder to secure funding for a smaller business.
However, the majority of developers agree that no matter the size, sourcing funding is the hardest part of running their business (78%), with the same number agreeing that it is difficult to source the right financing expertise.
Fortunately, specialist funding is available for developers struggling to access funding for their projects, and three quarters (77%) said that specialist lenders offer better support to property developers.
Housebuilding is a key issue on the political agenda, and it’s clear that more needs to be done to support developers access the funding levels they need so that these much-needed projects can get off the ground. These numbers show a clear funding gap, but the reality is that there is funding liquidity in the market, and working with a specialist lender can help with structuring developers’ funding needs to surface that liquidity. If the gap is not addressed, promises to boost housing numbers will be very difficult to achieve.
Methodology
Research was conducted by Censuswide between 16.04 - 03.05 2024, surveying 567 property developers aged 18+ across England, Wales and Scotland.
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