The Intermediary – January 2026 - Flipbook - Page 38
SPECIALIST FINANCE
Opinion
2026 success hinges
on planning and
proactive partners
I
n the lead-up to the Autumn
Budget, the UK property
development sector was
operating under a cloud of
cautious anticipation. Our
research captured the overall
sentiment from the industry in this
period – with 45% of developers
holding a negative outlook on the
economy, and 79% reporting difficulty
accessing Government support.
There was hope that the
Government would share a plan to
deliver on the structural ‘building
blocks’ the industry has been crying
out for. But the Budget ended up
feeling like a missed opportunity.
Rather than providing a catalyst for
growth, the Budget announcement
le critical issues unaddressed.
As we move into 2026, it is clear that
developers cannot wait for a ‘cavalry’
that may never arrive. Success over the
next 12 months will depend on how
the sector navigates three persistent
challenges: planning inertia, the cost
of talent, and a stagnant sales market.
Red tape versus reality
The Government’s ‘build, baby, build’
mantra has always been contingent on
planning reform. A fih of mid-sized
developers cited a reduction in red tape
and regulation as a key priority, and
while the Budget included mention of
this in the long-term, it provided no
immediate relief from the endemic
red tape.
We must be realistic - planning
reform is a slow solution to an urgent
crisis. Even with the appointment
of new advisers and the promise
of streamlined processes, these
structural changes will likely take
years to deliver tangible benefits.
In 2026, developers will still find
themselves navigating a complex,
under-resourced system.
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The Intermediary | January 2026
The strategy for the year ahead
must be one of ‘proactive patience’.
This means accounting for longer
lead times in financial planning and
ensuring that projects are futureproofed against shiing requirements.
Those who thrive will be the ones
who treat planning not as a hurdle
to be cleared, but as a core risk to be
managed with robust contingencies.
One of the most disappointing
aspects of the recent policy landscape
has been the lack of movement on the
skills gap. Despite the Government’s
ambition to train 60,000 more skilled
construction workers by 2029,
we are yet to see a notable shi in
the workforce.
23% of developers were looking to
the Government for support with
hiring talent and training younger
workers, but the Budget’s tax hikes
and the rise in the National Living
Wage has had quite the opposite effect.
For 2026, this creates a dual
pressure: a lack of skilled labour
coupled with rising operational
costs. In the year ahead, successful
project management will depend on
careful people management and cost
efficiencies. Developers must ensure
their financial partners understand
these inflationary pressures and
offer the flexibility required to keep
sites moving.
Facing a stagnant market
The engine of the housebuilding
industry is the first-time buyer,
and currently, that engine is at risk
of stalling. Without a successor to
the Help to Buy scheme or a revised
incentive package, the ‘entry-level’
of the market is struggling under the
weight of high inflation and interest
rates. The absence of support for firsttime buyers in the Budget suggests
that 2026 will be a year of sales market
TERRY WOODLEY
managing director of
development finance
at Shawbrook
uncertainty, and a potential that it
will stagnate.
For developers, this requires a
shi in thinking. We are already
seeing a move toward more diverse
models, such as Build to Rent (BTR)
or professionalised house in multiple
occupation (HMO) schemes, to tap
into the persisting rental demand
where homeownership is out of reach.
Financial planning for 2026 must
account for potentially slower sales
and ongoing uncertainty. This
is where the choice of a funding
partner becomes critical. Working
with a lender who understands the
cyclical nature of the market – and
who won’t disappear when the sales
curve flaens – will be the difference
between a stalled project and a
successful completion.
Filling the ‘support gap’
Despite the disappointments of the
Budget, there does remain hope.
Ahead of the announcement, 72%
of developers expressed trust in the
Government to contribute to small
and medium-sized enterprise (SME)
growth in the year ahead. While
that trust may have been rocked,
the underlying resilience of the
sector remains.
UK developers are among the most
adaptable in the world - they have
spent years building in spite of the
system, not because of it. Success in
2026 will be delivered by developers
who are proactive, resilient, and
supported by partners who truly
understand the complexities of
the landscape. ●
