It’s been a rough ride for property developers lately. The industry has taken a battering, with fewer new homes being built and banks being stingier with loans. But hold on to your hard hats, because things are about to change.
Here’s the summary:
- 2025 is set to be a BOOM year for property development. Experts at Rangewell, a specialist lending firm, say the industry is poised for a massive comeback after a difficult 2024.
- Loans are getting EASIER to secure. Banks are becoming more optimistic and are opening their coffers to developers again. Even better, they are offering larger loans with better terms.
- House prices are expected to RISE. As demand for housing outstrips supply, experts believe that property prices will increase, meaning bigger profits for developers.
Why the sudden change of heart?
- Interest rates are FALLING. The Bank of England has already slashed interest rates, and economists predict further cuts, making it cheaper to borrow money.
- The government is DESPERATE for new homes. The new Labour government has pledged to build 1.5 million new homes and is looking at ways to free up land for development.
- People are itching to BUY. Lower mortgage costs mean more buyers are entering the market, creating huge demand for new homes.
The Numbers:
- Lending to the construction sector has shrunk for two years in a row, by -7.2% in 2023 and -4.0% in 2022. Rangewell predicts another drop of -5.2% in 2024.
- Fewer new homes are being built. In 2023-24, 162,350 new homes were started, a whopping 19.8% decrease from the previous year.
- But in 2025, lending is expected to EXPLODE with “high single-figure” growth predicted as early as the first quarter of the year.
What does this mean for you?
Now is the time to get your ducks in a row. Dust off your plans, polish your proposals, and get ready to strike while the iron is hot! As Alasdair McPherson at Rangewell puts it: “We’re already seeing improved confidence across the sector and appetites within the lending space have certainly improved…developers with good projects are receiving significantly better lending terms than even three months ago.”