The majority (82%) of developers say they face challenges in the current market, a poll from lender Octane Capital shows.
High build and labour costs are the most pressing issue, cited by 34%, followed by planning delays or uncertainty (20%) and funding delays (14%).
Exit risk or slower sales (11%), valuation gaps (11%), and limited flexibility from mainstream lenders (10%) also restrict delivery.
Jonathan Samuels, CEO of Octane Capital, said: “Build costs, planning delays, and funding constraints remain an issue, which is why specialist finance continues to play such an important role.”
Sentiment has improved, with the help of the Bank of England’s decision to cut interest rates in December, to 3.75%.
Two thirds (67%) of developers believe that UK property market conditions will improve in 2026, while a third remain cautious.