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Why brokers should revisit developer clients in a slower sales market

When you think of London’s prime property market, many would consider it one of the most resilient areas in the housing sector. If a development was delivered in the right location, buyers were not usually sitting on their hands. Yet in the past year, the sense of certainty about the robustness of the market has weakened. Sales are taking much longer and prices are showing signs of decline. Developers are discovering that projects which might once have been turned around quickly are now demanding some serious patience.

Knight Frank’s latest figures show that average prices in prime central London fell by around 3 % in the year to July 2025, while growth in outer prime areas has largely flattened after a brief 0.6 % rise earlier in the year. Meanwhile, Jefferies has reported that in some of the capital’s most desirable boroughs, the total value of properties sold has dropped by as much as 60 % in the past twelve months, though this largely reflects the sharp fall in ultra-prime transactions rather than broad price collapse.

The catalysts for this slowdown are not difficult to identify. Government changes to non-dom tax rules have reduced demand from international investors, while higher borrowing costs and ongoing economic uncertainty continue to weigh on domestic buyers. The rental market remains reasonably firm, with prime rents up by around 1.9 % in the year to March 2025, but this offers little comfort to developers who rely on sales proceeds to repay finance and fund their next projects.

The squeeze on developers

Those facing the greatest pressure are often the developers approaching completion. Development finance is structured to be short term, with lenders expecting repayment when the build is finished. If sales are delayed, developers face three realities: 1) pay costly extension fees, 2) risk default charges, or 3) accept lower offers to generate liquidity quickly.

Some developers may consider letting units temporarily, but this can tie up capital and delay the ability to move on to the next scheme. In practice, many are left with difficult choices — reduce margins by selling too quickly or hold on to stock and stall their future pipeline.

The role of development exit finance

In situations like these, development exit finance can provide a far more practical way forward. Rather than being forced into discounted sales, developers can refinance onto an exit facility and, in doing so, repay their original loan on time while easing short-term financial pressure.

This type of facility is usually priced more competitively than development finance because the build is complete and risk is lower. Many exit loans also allow interest to be rolled up instead of paid monthly, which can help cash flow during the sales period. Crucially, where available, these facilities often come without early repayment charges, meaning that if units sell faster than expected, the developer can settle the loan without penalty.

Beyond easing the immediate pressure, exit finance provides flexibility. It enables developers to complete finishing works without rushing, hold out for buyers willing to pay full value, or even release equity for the next project. It should be seen not as a last resort, but as a way of managing the transition from build to sale effectively.

The opportunity for brokers

These conditions present a clear opportunity for brokers to add value. Many developer clients who secured finance during more buoyant years are now reaching completion in a very different market. By revisiting those clients and discussing how repayment will be managed if sales take longer than planned, brokers can open important conversations around exit finance.

The key considerations are familiar: the required LTV, term length, interest structure, and how quickly the lender can complete the refinance. By supporting developers through these options, brokers can help them avoid unnecessary costs, maintain control of their exit strategy, and protect relationships with their original lenders.

London Credit’s approach

At London Credit, we believe development exit finance should be viewed as a planned stage of a project’s lifecycle, not an emergency measure. Our focus on speed, flexibility and clear communication with brokers allows us to support a broad range of residential and semi-commercial projects, from experienced developers to those bringing their first scheme to market.

Turning slower sales into an opportunity

London’s property market is undoubtedly moving at a slower pace, and developers are feeling the effects. But while conditions are more challenging, there are solutions. Development exit finance offers the breathing space and flexibility needed to navigate longer sales cycles and preserve margins.

For brokers, revisiting developer clients now could make all the difference in safeguarding outcomes and helping projects deliver the returns they were always designed to achieve.

Constantinos Savvides, Head of Underwriting at London Credit

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