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The latest Stamp Duty shake-up kicked in from 1st April 2025 (sadly, this was not an April Fools’ joke) and while it may not have grabbed the front pages, for property developers the financial implications are not to be underestimated. And while it’s not devastating, it’s definitely not the helpful, hands-off HMRC moment we were all hoping for in Q2.

What’s changed? And more importantly – how do we go from here?

As of the 1st of April:

• The nil-rate band has shrunk from £250K to £125K.
• First-time buyer relief has been trimmed and only applies up to £300K (down from £425K)
• The maximum property value eligible for first-time buyer relief is now set at £500,000 (down from £625,000)
• The surcharge for purchasing additional residential properties, such as buy-to-let investments or second homes, has increased from 3% to 5%
• HMRC is also cracking down on all the creative ways people tried to wiggle around Stamp Duty in the past

In short: if your strategy involved buying a block, converting a house into flats, or snapping up portfolios, expect to pay more upfront in Stamp Duty (SDLT).

What This Means If You Develop Property for a Living

Let’s be honest, developing property isn’t for the faint of heart at the best of times. And now? You’re dealing with rising build costs, slower sales, and stamp duty that’s acting like it wants a stake in your company.

With the SDLT changes in effect, acquisition costs have gone up. Whether you’re buying land, flipping units, or building to rent, the squeeze on margins is real. But you’re not alone and this isn’t unmanageable. It’s just time for sharper planning and a little creative thinking around pricing and value-add.

The pace of the market has also shifted. If the first quarter felt like a scramble, it’s because many buyers were racing to complete before the deadline. That rush has passed, and things are naturally levelling out and it’s not a downturn – just a breather to give you space to reassess and refine your next steps.

So, What Now?

For UK property developers working at speed or scale, that extra SDLT can hit where it hurts – especially when you’re already juggling build cost inflation, planning delays, and that one neighbour who objects to everything but now that the dust has settled (and HMRC has made itself very clear), it’s time to adjust the game plan:

1. Re-run your numbers

This is also a good time to revisit the numbers. Margins, timelines, contingencies – they all deserve a second look. It’s not panic stations; it’s just making sure your projects are still running lean, smart, and ready to weather whatever’s next.

2. Check your funding structure

 If that SDLT hit has squeezed your capital, development finance could help cover gaps or smooth cash flow.

3. Talk to your advisers

This is not the time for guesswork or Googling. Your solicitor and tax advisor can help identify compliant structuring options, especially where there are commercial and residential elements.

Rest assured, a little recalibration now will go a long way in helping you stay confident and competitive in a changing market.

How Magnet Capital Can Support You

In a market where margins are tighter and planning needs to be sharper, developers need more than just finance – they need a partner who understands the full picture.

We work closely with developers to make sure projects are viable from day one. That means being fast, flexible, and realistic about what’s needed – not just in terms of capital, but in terms of support, strategy, and timing.

Our role is to provide finance solutions that match the way you work – even when the rules change. We’ve already helped clients navigate the impact of these changes, from reassessing loan requirements to structuring deals that still deliver.

If you’re a property developer looking for clarity or flexibility in your funding, our team is here to help. Call us on 020 8075 3255 or fill in our online form and someone will be in touch with you shortly.

In football, even the best strikers can’t win a match alone – they need a strong team around them to create opportunities and provide support. And the same goes for property development. While your vision and ambition are what drives the project, having the right team of experts in place to drive it will make for a more successful result.

Every position on your team plays a vital role in ensuring the development runs smoothly. From your architects and planners to your funding line and contractors, they will ensure challenges are overcome efficiently and within budget.

Who Should Be in Your Development Dream Team?

1. An Experienced Architect & Planning Consultant

You want an architect who gets your vision but also adds their own perspective, while making sure that your plans are compliant with local regulations. For help with planning, a local planning consultant will help guide you through any complex laws – increasing the chances of approval.

2. A Skilled Contractor & Project Manager

A skilled and trusted contractor will ensure your development is built on time, within budget, and to the highest standard. Meanwhile, a strong project manager will keep everything running smoothly, mitigating risk and handling the day-to-day challenges to prevent any costly delays

3. A Strong Legal Team

From site acquisition to JV agreements and planning permissions, a specialist property solicitor will give you peace of mind that every legal aspect of your development is covered – streamlining the process by managing contracts and handling any potential disputes.

4. A Specialist Finance Broker

A highly rated specialist broker ensures you secure the right funding for your project. With development finance being more complex than traditional mortgages, a specialist finance broker is well-versed on lender requirements so will negotiate the best terms and know how to structure your application effectively.

5. A Reliable Lender

A development finance lender that understands the challenges, offers flexibility when required, and delivers quick decisions is crucial. Delays in funding can be costly, so working with a lender who prioritises speed and certainty will keep your project on track.

How the Right Lender Made the Difference

This was clear when we were recently approached by a broker whose client was a first-time developer. They had identified a site they were eager to develop but through our early-stage analysis, we identified that the project lacked the necessary profit margin to make it a viable investment for the client.

Rather than push forward with a deal that wouldn’t serve the client’s best interests, we explained the potential risks to the client and his broker. Determined to pursue their first development, the client found a new opportunity – a single three-bedroom detached home with stronger ROI.

Now that the client had secured a more suitable site for a first-time developer, we worked closely with them and provided a 12-month loan facility, covering 55% of the GDV (plus rolled-up interest), 100% of the build costs, and 50% of the day-one purchase amount, with a total loan facility of £275,000 and a day-one loan amount of £75,000.

Choosing a lender who could immediately identify potential issues in their initial project and guided them toward a more viable project, helped them secure a site better suited to their experience.

With the right finance, legal, and construction team in place, the three-bedroom family home was completed within nine months, and the property is now on the market for £625,000. What’s more, the client is now NHBC accredited – a testament to the success of their first development project.

Why the Right Team Matters

Property development is a fast-moving, high-stakes industry where one weak link can lead to setbacks but with the right broker, lender, legal team, architects, and contractors, you’re putting your project in the best position.

Whether you’re a seasoned property developer or taking on your first project, surrounding yourself with a strong, experienced team will help you stay on track, overcome obstacles, and achieve the best possible outcome.

If you’re looking for a development finance lender who works with you, not against you, let’s talk: hello@magnetcapital.co.uk or 020 8075 3255.

In today’s fast-growing market, it can be difficult for property investors to maximise potential. If you’re considering diversifying your portfolio in 2025 – looking beyond the city centres is an opportunity worth seizing.

With rising demand for countryside living and strong returns on investment, rural property projects are becoming an increasingly attractive prospect.

Potential for Significant Growth

In fact, rural house prices have outpaced urban areas over the past 5 years . According to data from nationwide, between December 2018 and December 2023 house prices in predominately rural areas increased by 22%, compared with 17% in urban areas.

And experts say this demand will only increase – with rural house prices predicted to rise a further 4% this year.

With potential for such significant growth, it’s no wonder rural opportunities are becoming a popular choice among property developers. At Magnet Capital, we’ve certainly noticed an increase in enquiries for rural projects – funding for barn conversions, new-builds, and eco-friendly homes has risen steadily, as more developers tap into opportunities presented by the rural property market

We’ve noticed that enquires for barn conversions in particular have increased in recent weeks. This surge in interest is not surprising, as these types of properties can command a premium price, particularly in sought-after locations such as the Cotswolds, Southwest England, and the Lake District.

However, while the finished product can be spectacular, the process of converting an agricultural building into a residential property is anything but simple.

From planning complexities to securing the right funding, barn conversions require patience, and financial backing that is as flexible as the project itself is crucial.

The Barn Conversion Process

Unlike new builds, barn conversions are dictated by the constraints of the existing structure. That means developers must work within the limits of planning laws, structural integrity, and heritage considerations.

The process typically involves:

• Planning & Permitted Development Rights (PDR): some agricultural buildings can be converted under Class Q permitted development rights, removing the need for full planning permission. However, local authorities often impose strict conditions, and Article 4 directions can block PDR in certain areas
• Structural Considerations: Barns weren’t built for living. Many structures require substantial modifications to comply with building regulations
• Access Challenges: many barns are in remote locations, meaning mains water, drainage, and electricity may not be readily available
• Maintaining balance: There must be balance between maintaining the original features and integrating modern insulation, heating, and glazing to meet today’s energy efficiency standards

The Key Challenges

1. Funding

Barn conversions are inherently unpredictable, which many lenders see as a risk. Unlike traditional new-build developments, conversions don’t fit neatly into standard lending models. This creates barriers for developers looking to secure finance.

2. Planning

Even with PDR, local planning officers can impose strict conditions and there’s no guarantee that approval will  even be granted. Many lenders take a conservative stance, reluctant to finance a project until all planning and structural reports are in place.

3. Costs

Barn conversions often reveal hidden costs mid-build. Traditional lenders rarely accommodate for unforeseen expenses, leaving developers scrambling for additional funds.

4. Exit Strategy

Many high street banks and traditional lenders worry about the resale potential of rural properties, leading to restrictive lending criteria and reduced loan-to-value (LTV) ratios. For developers, this can mean limited borrowing power—even when the project is fundamentally viable.

Support is in the Right Place

At Magnet Capital, we understand the intricacies of barn conversions and will work with you to structure your barn conversion loan to align with your project’s needs, even if unexpected costs arise partway through.

For example, we recently funded a development project for a client who wanted to transform a derelict barn in Somerset into a stunning, high-specification rural retreat.

Initially, we provided a loan of £250,000 to support the development. However, midway through the project, the client recognised an opportunity to significantly increase the property’s sale value from circa £850,000, by converting the dormer space in the roof.

Believing in our client’s ambition and the potential value of their project, we worked closely with them to ensure they had the necessary capital to enhance the build and swiftly approved a £200,000 increase in their facility within hours. The client was then able to deliver the project on time and the additional funding enabled the expansion of the living space, significantly boosting the sale value (est. £1.5m).

A Smart Investment

For property investors, barn conversions offer a unique blend of character, demand, and profitability. Whether as a high-value resale project, a luxury rental, or an eco-friendly rural retreat, they provide diverse and scalable investment potential.

At Magnet Capital, we’re committed to helping property developers unlock the potential in barn conversions – not just by providing finance, but by being a trusted partner through every stage of the journey.

If you’re considering a barn conversion for your next project, let’s talk: hello@magnetcapital.co.uk or 02080753255.

The UK property development market is rarely predictable. After a turbulent few years, 2024 offered a degree of relief, with two interest rate cuts from the Bank of England (BoE), helping to ease financial pressures and fostering growth in the property sector. But as we navigate through January 2025, the property development landscape has once again shifted – presenting both challenges and opportunities for developers.

Inflation may be slowing, and borrowing conditions are improving, but these factors alone don’t guarantee smooth project delivery. If there’s one thing developers need in the current market, it’s flexibility—both in funding and in their ability to adapt to changing conditions.

2024 vs. 2025: The Changing Reality for Developers

Last year, many developers were cautiously optimistic. Interest rate reductions created breathing room, and for some, projects that had stalled due to financial constraints were able to move forward. But despite this, fundamental challenges remain in 2025:

• Planning system delays continue to stall developments: local authority bottlenecks remain a huge issue, with even straightforward applications taking longer than ever
• Build costs are unpredictable: while material prices have stabilised somewhat, labour shortages and contractor pressures highlight the need for adaptable budgeting
• Buyer demand is shifting: higher mortgage rates have changed affordability for homebuyers, and developers need to be agile in responding to what the market wants

Yet, one of the biggest challenges developers are facing currently isn’t market conditions—it’s access to finance.

January 2025: Navigating the Challenges

In theory, lower interest rates should have made borrowing easier. In reality, however, funding conditions this month have been far from straightforward. Many high street banks remain reluctant to lend at pre-pandemic levels, while some alternative lenders have pulled back, re-evaluating their risk appetite in the face of ongoing market uncertainty. The challenges in obtaining finance have been particularly pronounced for small and medium-sized enterprise (SME) housebuilders. According to the Home Builders Federation’s latest State of Play survey, 32% of SMEs that build 1-10 homes a year said access to development finance was a major barrier to growth, compared to 14% of those that build over 100 homes a year.

Developers are encountering a range of funding challenges, including:

• More restrictive lending criteria: many lenders have tightened their affordability and viability assessments, making it harder to get projects funded – especially for those with non-standard schemes or larger borrowing requirements
• Delays in decision-making: some developers have faced significant delays in getting funding approved, holding up progress at a time when speed is critical
• Limited appetite for new lending: some lenders have reduced their loan books, leaving developers scrambling for new sources of funding

For developers, this means one thing: a rigid, inflexible lender could stall or even derail a project.

Why Flexibility in Development Finance Matters Now More Than Ever

Property development is never a straight line from start to finish. Unexpected issues arise, whether that’s a delay in securing planning, a contractor going under, or a shift in exit strategy due to changing market conditions. Lenders who offer rigid, one-size-fits-all products will struggle to meet the needs of today’s developers.

A flexible finance partner can make all the difference. That means:

• Funding structures that adapt to real-world challenges: developers need lenders who can adjust terms when unexpected delays occur, rather than penalising them for circumstances beyond their control
• Speed in decision-making: delays in funding can be just as damaging as delays on-site. A lender who moves quickly can keep projects on track
• A pragmatic approach to exit strategies: market conditions in 2025 will continue to evolve, and developers need finance partners who can support refinements to sales or rental strategies as required

2025: A Year for Agile, Strategic Development

Despite the challenges, 2025 presents significant opportunities for developers who can adapt. Housing demand remains strong, but the key to success will be working with partners – whether that’s lenders, planners, or contractors – who understand the sector’s realities and can respond accordingly.

Rigid financial structures belong to a past market. In today’s climate, development finance needs to be as dynamic as the sector itself.

How Magnet Capital Stands Apart

For developers, these uncertainties make one thing clear: funding alone isn’t enough – it’s about having the right type of funding. Having a lender who understands the challenges of the sector and can offer pragmatic, adaptable finance is essential.

At Magnet Capital, we’ve always positioned ourselves as a partner, not just a lender. Our team work alongside developers every day, giving us insight into the challenges on the ground, adjusting funding structures, repayment terms, and even exit strategies to keep projects moving forward.

You’re not dealing with an algorithm or a tick-box underwriting process – we move quickly because we understand time is money and delays in funding can kill momentum on a project.

As developers look ahead to the coming months, those who prioritise flexibility – both in their project approach and their funding – will be best placed to succeed.

For more information on how Magnet Capital can help fund your next development project, contact us on 020 8075 3255 or hello@magnetcapital.co.uk.

I recall sitting at my desk in March of last year, with the COVID 19 pandemic’s impact starting to take hold and being told by surveyors and commentators that residential house prices would crash by 20%, possibly more. One mentor of mine, an industry doyen, said this will be like the property crash of 1973 again. As Managing Director of a Development Finance lender, I felt the cold winds of a housing crash, as we decided whether we should change our lending criteria, based on these warnings.

Here we are 18 months later and not a day goes by when I don’t read an article commenting on the surge in house prices. This is corroborated by our experience on the ground, where our borrowers are selling their completed developments in record time, at prices well above the levels we had originally valued the properties at. We are seeing houses selling off-plan or at the very early stages of the build. It is not unusual for there to be multiple offers from buyers, well over the asking price.

Our surveyors report the same is happening in other parts of the country. For example: double digit price rises in Nottingham, properties over £1 million in rural areas seeing 7% rises in the year to March and so on and so forth. Net mortgage borrowing was the highest in March 2021 than in any other month since comparable data began in 1993.

The reasons for this market mania have been well discussed. Low interest rates, a chronic shortage of supply of quality housing and lifestyle changes, where buyers want more space and are prepared to move out of urban areas, have led to increased demand. Then throw in a stamp duty cut, a scheme to support 95 per cent mortgages for first-time buyers and then the human element, whereby the fear of missing out leads to increased prices. It becomes a self-fulfilling prophecy, with the media, estate agents and other parties commenting on the surging house prices and the record highs, which in turn leads to buyers worrying that time is of the essence.

My fears back in March 2020 thankfully have not come true, but I am concerned that the market is now overheated, and we could see a readjustment, next year. We will see the effects of the end of the stamp duty cut, the possible ending of quantitative easing and interest rate increases. My sense is that the euphoria will stop and there will be a pull back. Hopefully, I am wrong, but I always prefer to hope for the best but prepare for the worst.

Sam Howard