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"We are still seeing strong demand for bridging among property investors"

ended 19. February 2025

Newspage asked specialist property finance brokers how active SME property developers are at present and how easy or hard it is for them to get finance in the current economic climate. Do bridging and development finance lenders have an appetite to lend and is there the confidence to build and invest among developers given the stagnant economy and ongoing threat of recession? Their views are below.

4 responses from the Newspage community

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Adam Stiles
Managing Director at Helix Financial Partners
We're seeing greater activity in the development market with the cost of borrowing dropping, which is unlocking previously unworkable sites. This, combined with landowners' realisation that the peak value of their land is long gone, is helping to create opportunity. We're also seeing a lot more at the smaller end with people converting large resi to HMOs (finding ways to engineer greater yields), plus more in the buy, refurb and sell market. Planning remains the biggest barrier to new build and ground up schemes.
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Graham Cox
Director at Bridging Hub
Demand for refurbishment bridging remains buoyant as the key metrics for developers to invest remain strong. High rents, decent yields and moderate growth in property values are supporting the market. In the south west, refurbishing houses to turn them into HMOs is still popular, though demand has been stifled by much lower numbers of overseas students attending universities in Bristol and elsewhere. But we're also seeing lots of developers converting commercial properties like B&Bs, pubs and office blocks into residential property.
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Marcus Wright
Managing Director at Bolton Business Finance
We are still seeing strong demand for bridging among property investors, who seem unworried about current market conditions. The fact is we have a housing shortage and rates trickling down, so confidence is still high. This is especially the case when it comes to residential refurbs, conversions to HMOs and commercial to residential conversions. However, the Renters' Rights Bill is causing some concern.
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Kelsey Phillips
Head of Specialist Lending at Arose Finance
After a tough year, SME developers are starting to experience momentum for ground-up projects driven by enhanced affordability in the first-time buyer market. Relatively high interest rates left many developers with unsold stock last year, but with rate cuts and regulatory shifts, we are starting to see meaningfully improved demand. Developers who were left with unsold inventory are now holding dozens of weekly viewings. We also see lenders demonstrating a renewed appetite to deploy capital into the sector, admittedly with some caution given the uncertain regulatory landscape.