"Developers will be hoping that the Government acts swiftly to attract talent and ensure developers have access to the skilled workers they need to meet the demands of a rapidly evolving market"
- Terry Woodley - Shawbrook
Property developers across the UK are raising concerns over two major issues they say are holding back growth: limited access to funding and a growing shortage of skilled workers.
New research from Shawbrook has revealed that 60% of developers find sourcing finance the most challenging part of their business. The same percentage say that navigating the complexity of available funding options adds to the difficulty. Meanwhile, 59% believe the funding choices on offer are too limited to meet their needs.
Small developers are feeling the pressure more acutely. According to the findings, 61% believe smaller firms face even greater challenges accessing finance, and 60% think these businesses are at a disadvantage compared to larger companies. Just under 60% also say mainstream lenders tend to favour established developers. As a result, many are turning to alternative funding sources, with 59% of respondents finding specialist lenders more supportive than traditional banks.
The issue of funding rejections also looms large. Previous Shawbrook research found that 26% of developers had been turned down by mainstream lenders more than once. Now, 27% are calling for dedicated grants to help bridge the funding gap, while 35% say the Government should invest more in infrastructure to support the sector.
Alongside financial concerns, developers are also highlighting a skills shortage as a major hurdle. Ongoing talent gaps have led 30% of developers to suggest bringing in foreign talent, while 25% want the Government to invest in training and upskilling to secure the future workforce.
“Just as funding is a barrier to growth, so too is the shortage of skilled professionals," explained Shawbrook's managing director of development finance, Terry Woodley (pictured). "Developers will be hoping that the Government acts swiftly to attract talent and ensure developers have access to the skilled workers they need to meet the demands of a rapidly evolving market."
“Over the last five years, the number of funding institutions focusing on the development sector has grown significantly. However, due to build cost inflation and base rate rises over recent years, developers have found it difficult to make schemes profitable, which in turn makes it harder to secure funding."
He added, "These costs are now stabilising, and we have seen base rate reductions, which is helping developers. As the property development industry continues to work through recent challenges, specialist support will help to address these concerns, ensuring the continued growth and success of developers across the country. This will enable them to press on with projects, which will play a key role in meeting the Government’s 1.5 million new homes target.”
