How interest rate stability could unlock development activity in 2025

The rapid rise in interest rates between 2022 and 2023 caused significant disruption across the development market. Higher debt costs squeezed appraisals, reduced land values, and forced many schemes back to the drawing board.

Now, with inflation appearing under control and the Bank of England signalling stability, confidence is gradually returning. While debt remains more expensive than in the previous decade, the key difference is predictability. Developers and lenders can now underwrite projects with greater certainty, without the constant fear of further rate hikes.

For refinancing, this is particularly significant. Borrowers who delayed sales or lettings during volatile conditions are now better placed to restructure facilities and complete projects. For acquisitions, stable rates also allow developers to re-enter the land market with more confidence about future viability.

Stability does not mean cheap finance, but it does mean clarity. And in development, clarity often matters more than price. Imperial Blue Finance offers fixed-rate loans that give developers confidence in a stable cost of funds, ensuring projects can progress with predictable finance.