The Intermediary – September 2025 - Flipbook - Page 68
SPECIALIST FINANCE
Opinion
Back-to-school:
Taking stock ahead
of the new year
A
s the industry returns
from the summer
lull, and the backto-school feel hits
the country, it is an
opportune moment
to take stock of the residential
development landscape.
Aer a challenging period for
developers, the need to assess lessons
learned, recalibrate strategies, and
prepare for what lies ahead has never
been more important.
Our aim is to support
developers [...] and seize
opportunities even in
the most testing market
circumstances”
Rising material costs, persistent
inflationary pressures, and recent
changes to employee national
insurance have all compounded the
pressures on developers. Construction
wages increased by 4% in the year
to June 2025, up from 3.8% in the 12
months to May, reflecting the reality
of rising operational costs across
the sector.
Output has slowed significantly.
Energy Performance Certificate (EPC)based tracking shows new home
completions fell 9% compared with
the previous 12 months, marking the
lowest annual volume since September
2016. Sales completions have also
soened, reaching levels not seen
since 2017 for transactions up until
December 2024. The introduction of
new Stamp Duty Land Tax (SDLT)
rules in April 2025 adds further
66
The Intermediary | September 2025
SEAN BROPHY
is chief commercial officer,
business finance at Triple Point
complexity, with early indicators
pointing to continued caution among
developers and buyers alike.
Regional performance
Areas with lower price points and
stronger affordability are experiencing
healthier completion rates, while
London and the South East continue
to experience the most pronounced
challenges. In these markets, higher
sales values reduce flexibility to
pursue alternative exit strategies
such as build-to-rent (BTR) or private
rented sector (PRS) developments.
Lower yields and refinancing
constraints requiring significant
equity input that further limit
options. Yet experience shows that
these regions are oen the first to
rebound, with house price growth
triggering a ripple effect across other
regions following London’s lead,
suggesting that the current slowdown
may be temporary.
Buyer demand trends offer
further insight into the decisions
developers are having to make when
they begin projects. Terraced and
semi-detached homes continue to
dominate transactions, followed
closely by detached properties. Flats
and maisonees have seen weaker
activity, reflecting both the removal of
Help to Buy and increasing mortgage
affordability pressures for firsttime buyers.
These paerns are consistent across
our loan book and our broader market
contacts, confirming the pressures
developers face and reinforcing
the need for careful, data-led
decision-making.
This evolving environment has
underscored the importance of
adaptability and informed judgment
when deciding which projects to take
on or fund. Our approach combines
experienced lenders, portfolio
managers, and credit specialists with
the use of advanced data analysis
and artificial intelligence (AI). This
allows us to assess trends, anticipate
risks, and structure deals that protect
downside while enabling projects to
progress. It is this focus on insight,
flexibility, and collaboration that
allows us to support developers
effectively in challenging conditions.
We have had to adapt our offering
to meet the realities of the current
market. Our emphasis is on enabling
developers wherever possible,
identifying ways to structure
transactions that work within
prevailing constraints and help
projects reach completion.
In an environment defined by
complexity and uncertainty, the
ability to adapt, anticipate shis,
and find inventive solutions is more
important than ever. Our aim is to
support developers in navigating these
conditions, helping them to progress
their projects confidently and seize
opportunities even in the most testing
market circumstances. ●
Shouldering lessons learned from a market in flux
