“It’s clear that 2025 remains a testing environment for property developers, with high interest rates, funding pressures, and market uncertainty weighing heavily on confidence”
– Jonathan Samuels – Octane Capital

UK property developers are increasingly relying on bridging finance as they respond to ongoing financial constraints, with one in three scaling back or delaying projects due to limited access to funding, according to new research from specialist lender Octane Capital.

The survey, conducted among active UK developers, found that 36% are using bridging finance in 2025, making it the most common form of funding. This places it ahead of buy-to-let or commercial loans, cited by 22% of respondents, and refurbishment finance, used by 17%.

While nearly half of developers (46%) said their output has remained stable compared to 2024, 30% reported having paused operations altogether amid current market uncertainty. Another 13% stated they are pursuing opportunities more selectively, and only 12% said their development activity has increased this year.

The findings highlight widespread caution in the sector. A total of 51% of respondents said they do not feel confident about starting a new project within the next 12 months, while 34% confirmed they had already postponed or scaled back a development in the past year due to funding constraints.

Interest rates were identified as the primary barrier to securing finance, with 40% of developers naming them as their top concern. Planning delays or uncertainty were highlighted by 16%, and lender appetite by 14%, suggesting that multiple pressures are converging to limit development momentum.

Despite these difficulties, many developers still see opportunities to access funding. A majority of respondents (65%) rated their access to specialist development or exit finance as either “reasonable” or better, indicating that while terms may have tightened, viable financing routes remain available.

“It’s clear that 2025 remains a testing environment for property developers, with high interest rates, funding pressures, and market uncertainty weighing heavily on confidence,” said Jonathan Samuels, chief executive of Octane Capital. “But what’s encouraging is that bridging finance continues to play a vital role in keeping projects moving, offering developers speed and flexibility when traditional funding routes fall short.”

“Despite the challenges, most developers are still active in the market and can access funding – albeit with more cautious terms,” Samuels continued. “This resilience, supported by specialist lenders, is what will keep the development sector ticking over as we head into 2026.”