Funding Property Development After Reeves’ Budget: What Developers Need to Know

Reeves placed housing at the centre of her Budget. Faster planning decisions, more land release and greater emphasis on housing delivery were headline promises. Labour says this will unlock growth. The Conservatives pointed out that similar promises were made before and progress was slow. Kemi Badenoch argued that developers want action, not announcements.

Lenders are very aware of this divide. Development finance decisions depend heavily on planning certainty, economic confidence and sector stability.

A clear example of Budget optimism in action is a developer who recently secured funding to convert a commercial building into residential flats. Their lender believed long term demand would remain strong due to ongoing housing shortages.

However, another developer seeking finance for a new build scheme faced hesitation from lenders because planning approval was delayed. Despite the Budget's promise of more efficient planning, the lender was waiting for evidence before committing.

Comparing this to 2020 to 2022, we see lenders are far more selective now. There is opportunity for experienced developers, but less tolerance for risk.

If you want help strengthening your development proposal, email pa@otiumpartners.com.