The Intermediary – July 2026 - Flipbook - Page 54
Q&A
CrowdProperty
The Intermediary speaks with Steve Smith, head of sales
at CrowdProperty, about the changing face of property
development finance
How has the profile of the average
development finance case changed?
The biggest change is that there probably isn’t an
‘average’ development finance case anymore. One
could argue that there never was, but we certainly
see many more varied cases across our desk.
Higher land values, planning challenges and
tighter margins mean developers are creating
value in different ways, whether that’s through
below market value acquisitions, commercial-toresidential conversions, rural developments or
modern methods of construction (MMC).
Building with sustainable materials and energy
efficiency is also becoming commonplace. We’re
also seeing more first-time developers entering
the market, often bringing strong professional
expertise and experienced teams with them or
bringing in joint venture partners, adding another
dimension to the deal.
None of these scenarios are unusual in isolation,
but together they reflect how the market has
evolved. The challenge is that many lending
models haven’t evolved at the same pace. As a
result, more commercially viable schemes are
sitting outside standard lending criteria.
Has the process shifted from
simply finding the cheapest
funding to the right underwriting
philosophy?
Absolutely. Price will always matter, but it’s
rarely the deciding factor if the funding structure
provided doesn’t actually work for the project.
Developers can spend tens of thousands of pounds
on a site with soft costs – such as planning and
professional fees – so does your lender recognise
and fund some of these costs on day one?
Today’s brokers need to understand how
different lenders think. A rural development,
a below market value acquisition or a first52
The Intermediary | July 2026
time developer might all be perfectly viable
opportunities, but not every lender will assess
them in the same way or even entertain funding
the deal at all.
Just as importantly, brokers should look beyond
the initial credit decision. Development projects
evolve, and it’s not unusual for challenges
or changes to arise during underwriting or
throughout the build.
The best lending relationships are built with
partners who take a pragmatic, solution-focused
approach – working with brokers and borrowers
to overcome issues where appropriate, rather than
stepping away as soon as a project falls outside a
predefined set of criteria. The right funding partner
can often support opportunities that would
otherwise struggle to progress.
Are you seeing confidence return
among SME developers?
I’d describe it as cautious optimism. Over the past
few years, developers have had to contend with
rising build costs, inflation, fluctuating interest
rates and planning delays. Those challenges
haven’t disappeared, and developers remain
understandably cautious about how they deploy
their capital.
That said, we’re seeing confidence return where
the fundamentals are right. Developers are still
progressing well-considered schemes, but they’re
approaching opportunities with greater discipline
than they did a few years ago. They’re spending
more time on due diligence, being more selective
about sites and placing greater emphasis on build
costs and realistic exit values.
We’re also seeing developers become more
resourceful. Rather than competing aggressively
for traditional opportunities, many are finding
value through repositioning assets, securing
planning uplift or exploring schemes that sit
outside the mainstream. That creates a more
resilient market. Developers aren’t chasing growth
for its own sake – they’re focusing on projects
