"Cost inflation, market uncertainty, and delays are part of the reality of development, but traditional lenders are often quick to apply pressure rather than work collaboratively. This can leave projects at risk of stalling or being sold off prematurely"
- Jonathan Samuels - Octane Capital
Jonathan Samuels, CEO of specialist lender Octane Capital, has highlighted how traditional lenders are often too quick to apply pressure to the nation’s property developers, rather than taking a collaborative approach to help them manage cost inflation, market uncertainty, and project delays.
The latest research from Octane Capital shows that one in five UK developers are struggling under pressure from their existing lenders, with many dealing with cost overruns, project delays, and tighter funding conditions that put schemes at risk.
The survey* of UK developers, commissioned by Octane Capital, found that 20% are currently facing pressure from their lender.
Among those affected, late-stage projects were most exposed. Eighteen per cent of developers said their lender had increased pressure during the sales or completion phase, compared with 10% at the early stage and 7% during construction.
Cost overruns (20%), project delays (17%), and unfavourable market conditions such as higher interest rates and softer values (17%) were the main triggers for this pressure.
The most common methods lenders use include:
Demanding higher fees or rates (24%)
Withholding or delaying drawdowns (22%)
Selling or transferring loans to another party (20%)
Pressuring developers to sell units at reduced prices to accelerate repayment (17%)
Threatening funding altogether (17%)
Perhaps most concerning is the lack of support developers report receiving. Only 16% described their lender as very supportive, while 57% said their lender was not supportive.
As a result, 23% of developers have turned to specialist lenders in the past year, highlighting the increasing role of alternative finance in today’s challenging development landscape.
“Cost inflation, market uncertainty, and delays are part of the reality of development, but traditional lenders are often quick to apply pressure rather than work collaboratively. This can leave projects at risk of stalling or being sold off prematurely," said Jonathan Samuels, CEO of Octane Capital.
He added, "Specialist finance can provide a vital lifeline in these circumstances, offering the speed, flexibility, and partnership approach that developers need to overcome challenges and deliver homes. At Octane Capital, we understand the pressures developers face and are committed to providing solutions that keep projects moving, even when the unexpected happens.”
