Jonathan Samuels, CEO of specialist lender, Octane Capital, believes that growing economic and political uncertainty has caused developer confidence to weaken considerably during the first quarter of 2026, with a growing number now turning to specialist finance in order to navigate increasingly difficult market conditions.
The quarterly survey, commissioned by Octane Capital, tracks how developer sentiment, project appetite, and reliance on specialist finance are shifting as market conditions evolve.
The research shows that just 35% of developers now believe UK property market conditions will improve in 2026, down significantly from 67% in Q4 2025, a quarterly decline of -32%.
Despite this deterioration in sentiment, reliance on specialist finance continues to strengthen. The survey found that 72% of developers now expect to utilise specialist finance to help navigate market challenges in 2026, up from 65% in Q4 2025.
Bridging finance remains the most commonly expected product, with expected usage increasing from 33% to 40% quarter-on-quarter. Refurbishment and light development finance also saw a notable rise in demand, increasing from 18% to 24%.
At the same time, appetite to progress new projects has also weakened. Just 20% of developers now say they are more likely to progress or break ground on development or investment projects in 2026 compared to 2025, down from 36% in Q4. Meanwhile, the proportion stating they are less likely to proceed has climbed from 30% to 37%.
This weakening confidence comes as developers continue to face significant challenges across the market, with 91% now stating that obstacles remain within the current environment, up from 82% previously.
Planning delays and uncertainty remain one of the biggest concerns amongst developers, cited by 21% of respondents, whilst funding delays and uncertainty have also increased to 17%. High build and labour costs continue to rank as the most significant challenge overall, highlighted by 29% of developers surveyed.
When asked what could improve market conditions moving forward, greater political and economic certainty ranked highly amongst respondents, whilst stabilising construction and material costs also saw a notable increase in importance versus the previous quarter.
The growing reliance on specialist finance reflects the increasingly complex nature of the market, where developers are requiring greater speed, flexibility, and certainty in order to progress projects and manage changing conditions.
Jonathan Samuels, CEO of Octane Capital, commented:
“The first quarter of the year has clearly seen confidence soften amongst developers, with economic uncertainty, funding pressures, and wider market instability all weighing on sentiment.
The market remains extremely challenging to navigate and, whilst developers still want to progress projects, many are becoming more cautious around timing and delivery.
At the same time, the increase in demand for specialist finance highlights just how important speed and flexibility have become within the current environment.
As transactions become more complex and conditions continue to shift, developers are increasingly looking towards specialist lenders who can provide the certainty and agility required to keep projects moving forward.”
