UK property developers are increasingly turning to bridging finance as they face continued pressure from high interest rates and tighter funding conditions, according to new research from specialist lender Octane Capital.
The lender’s survey found that 36% of developers are actively using bridging finance in 2025, ahead of traditional buy-to-let or commercial loans (22%) and refurbishment finance (17%).
It comes as 34% of developers said they had postponed or scaled back a project in the past year due to financial constraints.
While nearly half (46%) said their development activity had remained stable since 2024, 30% reported having paused activity entirely due to market uncertainty.
Only 12% said they had increased output, and 13% noted they were being more selective with new schemes.
Interest rates were identified as the biggest challenge to securing finance, cited by 40% of respondents.
Planning delays (16%) and lender appetite (14%) were also mentioned as key obstacles.
Confidence remains subdued, with 51% of developers saying they were not confident about launching a new project within the next year.
Despite these issues, 65% said their current access to specialist development or exit finance was “reasonable” or better, indicating that while conditions may be more restrictive, developers still have viable options.
Jonathan Samuels, CEO 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.
“But what’s encouraging is that bridging finance continues to play a vital role in keeping projects moving, offering developers speed and flexibility when traditional funding routes fall short.
“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.”
