Navigating 2025: the state of the UK property development finance market

2025 has opened with a cautiously optimistic tone in UK real estate. After two years of uncertainty around interest rates and cost inflation, developers and lenders are beginning to see a path forward.

High street banks remain cautious. Many continue to restrict leverage to conservative levels and are reluctant to back first-time developers or projects with significant planning or construction risk. However, demand for new housing and mixed-use schemes remains strong, particularly in urban centres with clear employment and transport drivers.

This gap has widened the role of specialist development finance providers. Speed of execution, flexibility on leverage, and the ability to structure around complexities have become decisive advantages. Investors backing these providers also see the opportunity to capture attractive risk-adjusted returns in a market where equity alone often struggles to make projects viable.

Looking ahead, if inflation remains under control and the Bank of England signals stability on rates, we may see a material uptick in refinancing activity and new starts. For developers, the key is demonstrating credible experience, robust appraisals, and a clear exit strategy. For lenders, disciplined underwriting remains essential, but the opportunity to support viable schemes has rarely been stronger. Imperial Blue Finance offers direct access to credit decision-makers, with development finance loans up to 90% LTC and rapid execution that gives developers certainty in a cautious market.