Developer confidence is on the up as 67% believe that UK property market conditions will improve in 2026 according to Octane Capital.

More than a third of developers (36%) say they are more likely to progress or break ground on development or investment projects in 2026 compared to 2025, while a further 34% expect activity levels to remain broadly unchanged, whilst 30% anticipate scaling back activity.

Jonathan Samuels, CEO of Octane Capital, said: “Developers are clearly drawing confidence from a stabilising lending environment, particularly with interest rates now moving in the right direction and now that Autumn Budget uncertainty has lifted. 

“This stability is crucial, as it allows developers to plan with greater intent, however, confidence alone does not remove the underlying challenges faced. Build costs, planning delays, and funding constraints remain an issue, which is why specialist finance continues to play such an important role.”

Despite the improving outlook, challenges remain with 82% saying they still face obstacles in the current market as high build and labour costs remain the most pressing issue, according to 34% of respondents, 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 continue to restrict delivery.