From planning delays to buyer behaviour, here’s how developers are adapting

The UK’s residential development landscape in 2025 is defined by complexity. While appetite remains strong, the journey from site acquisition to delivery is not always straightforward. Developers are operating in a high-cost, high-risk environment, navigating tighter margins, shifting regulations, and slower buyer demand.

In our recent OakNorth webinar, Behind the Build: The reality of residential development in 2025, we spoke with Dean Leslie (GLPG) and Max Kyte (Kyte Property), hosted by Greg Manson (OakNorth), to unpack the reality on the ground. Here’s what came through, and where opportunity may still lie.

Planning and Gateway delays are still the biggest blockers

Across the board, planning delays continue to be the most significant barrier to delivery. Developers are reporting longer wait times, less predictability, and limited feedback, even for schemes that are well prepared and policy-compliant.

It’s not just about planning permission. Gateway Two, part of the Building Safety Regulator framework, adds up to 18 months of extra wait time before construction can begin. According to webinar attendees (which was made up of property developers, investors, debt funds, brokers, and other key business influencers), 41% said planning delays are currently the most significant hurdle, followed by build cost inflation and buyer uncertainty.

Developers are rethinking their exit strategies

Where build-to-sell used to dominate, many developers are now appraising schemes with refinancing or long-term rental strategies built in. This reflects what’s happening on the ground – slower absorption rates and longer timelines to reach profitability.

Today’s model is more about flexibility. Projects that can shift with market conditions are the ones getting funded and delivered.

Cost control is critical, and conservative assumptions are the new normal

Build costs may be stabilising, but margins are still tight. Developers are approaching appraisals with stronger contingencies, greater scrutiny, and a firm focus on realistic assumptions. The discipline to run multiple scenarios, and to act on them, is proving key in navigating delivery risk.

Buyer expectations are evolving

First-time buyers are more hesitant, often waiting for rates to fall or skipping smaller units altogether. Meanwhile, downsizers and cash buyers remain active but cautious.

This is driving demand for higher-quality design, better layouts, and flexible space. Developers who can stand out on spec and location are continuing to see movement, even in a slower market.

MMC is gaining traction, but it’s not one-size-fits-all

Modern methods of construction (MMC) are becoming more popular, especially among developers working to tight timelines or with modular delivery experience. Off-site manufacturing, timber frame builds, and CNC-driven systems can speed up programmes and improve cost control.

But MMC isn’t suitable for every scheme. Planning approval, buyer preferences and site-specific constraints still play a big role in whether it’s the right fit.

What would help unlock delivery this year?

When asked what would unlock more progress in 2025, attendees said:

  • Faster planning decisions (50%)
  • Reduced build costs (23%)
  • More flexible lending (14%)
  • Stronger buyer demand (9%)

It’s clear that developers are working to adapt, but they can’t do it alone. Structural issues around planning, finance, and regulation remain the biggest barriers.

Looking ahead: cautious optimism with clearer priorities

Despite the challenges, the tone from our panel was optimistic. Developers are actively pursuing opportunities and structuring their projects with more realism and resilience.

Those who are building with flexibility, discipline, and the right partnerships in place are well positioned to navigate what’s next, and to deliver the homes the market still needs.

We’d like to thank Dean Leslie, Max Kyte, and our host Greg Manson for sharing their insight and experience during the session. To explore these themes in more detail, you can watch the full webinar replay here.

If you’d like to speak with our team about how these trends could affect your development plans, get in touch at [email protected].