The notion that developers have stepped back this year does not really stand up to scrutiny once you look at what is actually getting done.
Activity has changed, and there is no real debate around that, but what we are seeing in practice is a market that has narrowed rather than halted, where deals are still progressing, funding is still available, and demand is still there. It is just far more selective than it has been in recent years.
In other words, opportunity has not disappeared, it has become more defined. The schemes that are moving are not the ones relying on everything going right, they are the ones that continue to hold together when assumptions are tested properly.
Supply is still tight, but it is not doing the heavy lifting
There is still a clear imbalance between housing supply and demand, and that has not corrected itself. UK government data shows that 124,860 homes were started in the year to December 2025, up 15% year-on-year, but that remains below previous peaks.
At the same time, overall delivery continues to fall short of long-term requirements, with around 208,600 net additional dwellings delivered across 2024 to 2025.
Alongside this, NHBC reported an 11% increase in new home registrations. That does point to improving activity, but not at a level that fundamentally changes the supply picture.
You could reasonably assume that backdrop should support development more broadly. And to a degree it does. But in practice, supply shortages alone are no longer enough to carry weaker schemes through, because demand by itself is no longer enough to offset softer fundamentals or overly stretched assumptions.
Anyone who has spent time in this market will recognise that pattern. The backdrop can be supportive, but the deal still has to stand up on its own terms.
Cost assumptions are being tested much earlier
At London Credit, we see cost control is still very much in focus. The pace of increase may have eased, but nobody in the market is taking pricing at face value anymore.
Our underwriters are looking far more closely at how figures have been built up. They want to understand whether there is any meaningful buffer in place if things move, because we have all seen what happens when costings are set too tightly and reality does not quite follow the plan.
In practical terms, that means cases are being challenged earlier, not rejected outright, but tested more thoroughly before they ever get to a formal decision.
The market is no longer moving in one direction
Another point that is becoming harder to ignore is just how uneven the market has become. Some local markets are seeing higher levels of available stock, which gives buyers and tenants more choice, but also exposes where demand is softer.
Some areas continue to perform well, whilst others are more sensitive, whether that is down to affordability, supply levels or local conditions. In other words, the idea of a single “market” feels less and less useful.
For developers, that makes site selection far more important. And for brokers, it means understanding the local picture is just as important as understanding the deal itself.
Refurbishment is doing a lot of the work
One area that has continued to hold up is refurbishment and repositioning. Improving existing stock often provides a more direct and controllable route to creating value.
We have seen this time and again. Where a borrower can take a property that needs work, apply a clear and well-costed plan, and bring it back to market in a stronger position, the fundamentals tend to make a lot more sense.
The stronger cases are usually easy to spot, with a clear schedule of works, costings that are grounded, a borrower who knows what they are doing, and an exit that has been thought through properly.
Where those elements are missing, things tend to become that bit trickier, and more often than not, that is avoidable.
The broker role has changed
The role has evolved slightly for brokers. It may not always feel dramatic, but it is becoming more important.
Rather than simply placing a completed deal, there is now more involvement in shaping it before submission. That might mean challenging timelines, questioning cost assumptions or tightening the exit.
A narrower, but clearer, opportunity
So where are developers finding opportunities in 2026? Not everywhere, but they are finding them where the fundamentals are sound. That does mean a narrower field. But it is also a clearer one.
And for brokers operating in this space, that clarity is important, because the deals that are progressing now are not necessarily the most ambitious, they are the ones that hold together when you take a closer look.
