The Intermediary – October 2025 - Flipbook - Page 47
SPECIALIST FINANCE
Opinion
Unlocking
development in
the South East
T
he housing market in
London and the South
East remains one of
the most dynamic in
the UK. The developers
working in these
regions continue to face a mix of
opportunity and challenge, reflected
starkly in the most recent government
data. While much of the focus falls
on housing, commercial and mixeduse schemes are also shaping these
markets, particularly in London
where demand for flexible space and
repurposed assets continues to evolve.
Having spent many years working
across the South M25 corridor
and South Coast, I have seen firsthand how local conditions shape
outcomes for both residential and
commercial developers.
According to the Office for National
Statistics (ONS), both London and
the South East recorded a drop in the
number of additional net dwellings
produced between 2023/24 and
2024/25. While housing starts in
the South East held up beer than
expected, London saw the sharpest
decline of all, with starts falling by
73%. Planning figures tell a similar
story. The two regions accounted for
around 35,000 of the 91,000 planning
applications received across England
in the first quarter, yet approval rates,
at 82% in London and 87% in the
South East, were among the lowest of
any region.
These figures highlight the dual
reality developers are contending
with. Demand in these regions is
intense, but the delivery of new
housing remains difficult.
Ambition versus delivery
The Government has made housing
supply a centrepiece of its political
agenda, with schemes such as the
New Homes Accelerator designed
to cut the time between consent and
construction. Early reports suggest
it has helped accelerate delivery on
around 100,000 premises nationally,
with the upcoming focus areas
including sites in the capital. But
the question is not whether these
initiatives make headlines, but
whether they meaningfully change
conditions for developers. As we have
seen before, seing targets is one
thing; creating the environment to
meet them is quite another.
Unless developers, and particularly
small to medium enterprises (SMEs),
are supported with faster approvals
and funding structured around
how schemes really work, progress
in London and the South East will
remain uneven.
Planning delays remain one of
the most consistent frustrations for
SME developers. Local authorities are
under strain, with many departments
operating with reduced resource. For
smaller developers, those delays can be
critical. Unlike volume housebuilders,
SMEs cannot afford to sit on sites
indefinitely.
That is why relationships maer.
Developers who engage proactively
with planning officers, building a
dialogue early and submiing wellprepared applications, oen stand the
best chance of avoiding unnecessary
setbacks.
Role of relationships
Strong relationships are just as vital
when it comes to funding. London and
the South East are markets defined by
their quirks, from borough-specific
planning requirements to unique
buyer dynamics.
Having a lender that knows the
patch, understands those nuances, and
can structure funding accordingly can
LIAM MULLANS
is lending director for London
and the South at Hampshire
Trust Bank
be the difference between momentum
and stagnation.
Developers need lenders who
recognise that projects rarely follow
a straight line. Nowhere is that more
evident than in London and the
South East.
My previous experience in the
hotel sector reinforced this point:
commercial projects are highly
sensitive to shis in demand, and rigid
funding structures can quickly stall
progress. The same lesson applies to
residential developers navigating these
regions today.
Unlocking potential
Despite the challenges, the appeal
of these regions is undiminished.
For developers able to navigate
the hurdles, the rewards can be
significant.
The fundamentals are clear: we
need more homes, in more tenures,
delivered with greater consistency.
Achieving that requires collaboration
between government and planners,
between developers and local
authorities, and crucially, between
brokers, developers and funders.
While housing remains the priority,
commercial and mixed-use projects
are part of the same picture. Both need
planning systems that can keep pace
and funding partners who understand
how markets evolve.
London and the South East will
remain at the heart of the UK’s
development challenge. But unlocking
their potential will depend on more
than targets. It will depend on the
partnerships and resilience that turn
permissions into places where people
want to live, work and invest. ●
October 2025 | The Intermediary
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