Developers are turning to short-term finance to fill in the gap caused by funding challenges, Octane Capital research has found.
While 46% of developers say their activity has remained stable compared to 2024, nearly a third (30%) have paused entirely due to market uncertainty.
Jonathan Samuels, chief executive of Octane Capital, said: “It’s clear that 2025 remains a testing environment for property developers, with high interest rates, funding pressures, and market uncertainty weighing heavily on confidence.
“Despite the challenges, most developers are still active in the market and can access funding – albeit with more cautious terms. This resilience, supported by specialist lenders, is what will keep the development sector ticking over as we head into 2026.”
Some 36% of developers are actively using bridging finance in 2025, more than traditional buy-to-let or commercial loans (22%), as well as refurbishment finance (17%).
Developers are cautious, as 51% said they are not confident about launching their next project within the next 12 months.
A further 34% confirmed they had already scaled back or postponed a development in the past year due to financial barriers.
