The Intermediary – June 2025 - Flipbook - Page 50
SPECIALIST FINANCE
Opinion
From unstable to
unshakable
F
or small and
medium-sized (SME)
developers and
property professionals
undertaking heavy
refurbishment or
development projects, the UK market
continues to present both opportunity
and volatility in equal measure.
These borrowers – oen highly
skilled, resourceful, and with a
strong understanding of their local
market – are the backbone of the
UK’s housing delivery outside of
major PLC housebuilders. But they
are also among the most exposed to
disruption, particularly when it comes
to costs, timelines, and accessing the
right funding.
Right now, the word we hear from
them most oen is ‘uncertainty’.
Shifting landscape
Rising costs are still a major challenge.
Although some material prices have
levelled out since the height of postCovid and post-Brexit disruption,
others – like insulation, timber, and
electrics – are still unpredictable.
Skilled labour is another ongoing
pressure point, with availability
patchy in many areas. That not only
drives up costs, but can also create
delays, especially on projects with
tighter build schedules.
Planning remains a hurdle, too.
Even for developers working under
permied development rights (PDR)
or change-of-use, the process can
drag, with timelines slipping more
oen than not.
When you’re working to slim
margins, these kinds of hold-ups
or unexpected costs can seriously
affect the boom line. There’s still
strong demand for well-built, energyefficient homes – but with mortgage
rates in flux, today’s buyers are more
cautious and price-sensitive than
they’ve been in recent years.
While the opportunity is there, it’s a
tough climate to navigate.
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The Intermediary | June 2025
Certainty matters
In this context, certainty is more
than just a nice-to-have, it’s a critical
foundation that allows developers to
plan confidently, manage cashflow,
and deliver on their ambitions.
For borrowers taking on a heavy
refurbishment project, knowing that
funding will be available for each
drawdown without unnecessary
hurdles is vital. Many work to tight
schedules and need a lender that
understands the build process, can
adapt to on-site changes, and doesn’t
make them jump through hoops once
a facility has been agreed.
For those embarking on a groundup scheme, having confidence in the
structure of their finance – from day
one through to exit – can make the
difference between a viable site and
one that never gets off the ground.
Developers aren’t just seeking
funding; they’re seeking partnership
and pragmatism.
Time and again, we hear the same
sentiment: “I just need to know where
I stand.” And understandably so. In an
environment where so many variables
are beyond their control, certainty
from their lender becomes the one
area they should be able to rely on.
What does certainty look like?
It isn’t about grand promises – it’s
about sticking to the other three
C’s: consistency, communication,
and clarity.
As a lender in this space, you must
ensure you have built an offering
around common-sense underwriting,
realistic timeframes, and a team that
doesn’t think twice to pick up the
phone and talk through a case when
things aren’t too straightforward.
For us, it’s about clear criteria
from the outset, so brokers and
borrowers can assess fit quickly and
efficiently, as well as underwriters
who understand construction and
the development finance market –
and who are empowered to make
decisions. Speed and transparency are
JIM BAKER
is sales director
at Masthaven Finance
big – particularly when it comes to
drawdowns and site inspections, but
perhaps most importantly of all: no
surprises! Developers have enough of
those without their lender chiming
in. This isn’t revolutionary, but in a
market where many have experienced
changing goalposts or slow decisionmaking, it makes a real difference.
The role of the broker
We also recognise the vital role
brokers play in delivering that
certainty. It’s the broker who
understands the client’s plans in
detail, prepares a robust case, and
helps manage expectations on all
sides. We see our best outcomes
when there’s strong communication
between broker, borrower, and lender
– where everyone is working towards
a shared goal. That collaboration
is especially important on heavy
refurbishments, where project scopes
can change during the works. Flexible
doesn’t mean vague – it means clear
parameters and a team that can
respond quickly.
As the market continues to evolve,
we expect demand for refurbishment
and smaller-scale development
funding to remain strong. There’s an
ongoing need for housing in the UK,
and SME developers are central to
meeting that need, oen delivering
creative, high-quality schemes that
larger players overlook. It’s our job as
a lender to give them the confidence to
keep going, take on that next project,
commit to that next build, and know
they have a funding partner who
understands what’s at stake.
When you’re trying to bring a site
to life – whether a rundown building
ready for transformation or a patch of
land with potential – certainty can go
a long way. ●
