A survey found that 72% of developers now expect to use specialist finance to help navigate market challenges in 2026, up from 65% in Q4 2025

Developer confidence declined sharply in Q1, but reliance on specialist finance is rising, according to Octane Capital.

A survey of developers by Octane found that 35% now believe UK property market conditions will improve in 2026, down significantly from 67% in Q4 2025, a quarterly decline of -32%.

The survey found that 72% of developers now expect to use specialist finance to help navigate market challenges in 2026, up from 65% in Q4 2025.

Bridging finance remains the most commonly expected product, with expected usage increasing from 33% to 40% quarter-on-quarter. Refurbishment and light development finance also saw a notable increase in demand, rising from 18% to 24%.

At the same time, appetite to progress new projects has also weakened. Just 20% of developers now say they are more likely to progress or break ground on development or investment projects in 2026 compared to 2025, down from 36% in Q4. Meanwhile, the proportion stating they are less likely to proceed has jumped from 30% to 37%.

This weakening confidence comes as developers continue to face significant challenges across the market, with 91% now stating that obstacles remain within the current environment, up from 82% previously.

Planning delays and uncertainty remain one of the biggest concerns amongst developers, cited by 21% of respondents, whilst funding delays and uncertainty have also risen to 17%. High build and labour costs continue to rank as the most significant challenge overall, highlighted by 29% of developers surveyed.

When asked what could improve market conditions moving forward, greater political and economic certainty ranked highly amongst respondents, while stabilising construction and material costs also saw a notable rise in importance versus the previous quarter.

Octane chief executive Jonathan Samuels said: The first quarter of the year has clearly seen confidence soften amongst developers, with economic uncertainty, funding pressures, and wider market instability all weighing on sentiment.

Samuels said: The market remains extremely challenging to navigate and, while developers still want to progress projects, many are becoming more cautious around timing and delivery.