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Opinion

We need to support all developers if we are going to build

Mark Dyason discusses how specialist finance can help unlock housing delivery and support SME developers.

5 min read
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We need to support all developers if we are going to build
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There was a noticeable sense of optimism at UKREiiF this year. That may seem surprising given the economic backdrop of recent months if not years, but the conversations taking place across Leeds reflected a market that increasingly believes the conditions exist to move from discussion to delivery.

The UK’s housing shortage is well understood. So too is the need to invest in the infrastructure that supports sustainable communities. What felt different this year was the growing alignment between policymakers, investors, local authorities and developers around the need to unlock development at scale.

The challenge facing the sector is no longer one of identifying demand. Demand is evident in every region of the country. The challenge is delivering sufficient housing, transport links, utilities and community infrastructure to support economic growth and meet the needs of a growing population.

Encouragingly, capital does not appear to be the primary constraint. Across the event, investors repeatedly demonstrated a willingness to support residential development and infrastructure projects that offer clear fundamentals, responsible stewardship and a credible path to delivery. Domestic and international capital continues to view the UK as an attractive market. The rule of law, transparent planning system, established property rights and long-term demographic trends remain compelling foundations for investment.

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The question increasingly becomes how that capital can reach the projects and developers capable of creating the homes the country needs. This is particularly relevant when considering the role of small and medium-sized housebuilders.

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For much of the past two decades, the UK’s residential development market has become increasingly concentrated among a relatively small number of large developers. While those businesses continue to play an essential role, there is growing recognition that solving the housing challenge will require a broader ecosystem of delivery partners.

Historically, small and medium-sized enterprise (SME) builders were responsible for a far greater proportion of housing delivery than they are today. They often possess deep local knowledge, strong community relationships and the flexibility to bring forward sites that larger developers may overlook. Many specialise in smaller schemes that collectively can make a significant contribution to housing supply. Yet access to development finance remains one of the most significant barriers they face.

Traditional funding structures can sometimes struggle to accommodate the realities of smaller developments. Complex approval processes, rigid financing criteria and changing market conditions can make it difficult for otherwise viable projects to secure the support they require.

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That creates an opportunity for specialist finance providers who understand both the risks and the potential of development investment. From a Sharia-compliant perspective, this opportunity is particularly significant. Islamic finance has always been closely connected to the real economy. The emphasis on asset-backed transactions, transparency and the sharing of risk and reward creates a natural alignment with residential development and infrastructure investment.

At its heart, development finance is about enabling productive activity. It supports the creation of tangible assets that serve communities, generate economic value and contribute to long-term prosperity. Whether that is a residential scheme delivering much-needed homes or an infrastructure project supporting regional growth, the underlying objective is one of responsible investment in the built environment.

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This philosophy resonates strongly with many of the themes discussed throughout UKREiiF. The conversation was not simply about increasing housing numbers. It was about creating sustainable places where people can live, work and build their futures. It was about regeneration, connectivity and long-term stewardship. It was about ensuring that capital is deployed in ways that create lasting social and economic benefit. These principles sit at the heart of values that underpin ethical finance.

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For financial firms operating within this framework, there is a clear opportunity to support a broader range of developers and projects. By working closely with experienced housebuilders, understanding local market dynamics and maintaining a focus on transparency throughout the funding process, specialist finance providers can help unlock schemes that might otherwise struggle to progress. This is particularly important at a time when policymakers are actively seeking ways to accelerate housing delivery. Planning reform, infrastructure investment and political support all have important roles to play. However, none of these initiatives can achieve their full potential without sufficient access to development capital.

The mood in Leeds suggested that many of the necessary ingredients are beginning to align. There is political recognition of the housing challenge. There is investor appetite for residential and infrastructure assets. There is a growing understanding of the contribution that SME developers can make. Most importantly, there is increasing willingness across the market to explore new approaches to funding and delivery.

The task now is to convert that optimism into outcomes and for specialist finance providers, including those operating within a Sharia-compliant framework, the opportunity is clear. By supporting responsible developers, funding productive projects and helping bring forward the homes and infrastructure the country needs, they can play an important role in shaping the next phase of growth.

If the conversations at UKREiiF are any indication, the appetite exists, the capital exists and the need certainly exists. The challenge for the market is ensuring that finance reaches the developers and projects capable of turning ambition into delivery.

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Mark Dyason is managing director at Gatehouse Bank

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