Planning pressures set UK developers up for failure, pushing more firms to the brink, Landwood warns.
UK developers are abandoning unfinished projects as cashflow pressures and planning delays push more schemes into receivership, Landwood Group warns.
The Manchester property experts have seen a marked increase in part-complete residential developments hitting the market. Developers continue to face the lasting financial impact of recent cost spikes and labour shortages, compounded by slow-moving planning reforms.
James Ashworth (pictured), partner at Landwood Group, said: “Developers and housebuilders have been hit hard over the past 18 months, with costs rising at a pace few could have predicted.
“While material prices are starting to level out, the financial strain they’ve left behind is still being felt, especially on projects already running on tight margins.
“Adding global supply chain risks and potential new US tariffs into the mix, there’s still plenty of uncertainty for developers to navigate.
“It’s no surprise we’re seeing more part-complete sites handed to receivers and administrators, as projects stall under the weight of these pressures.”
The warning comes as concerns grow over proposed US tariffs and scepticism mounts around the Government’s target of building 1.5 million homes by the end of this Parliament.
James added: “What’s more, the planning system simply isn’t moving quickly enough to help developers deliver sites or make any real progress toward the ambitious target of building 1.5 million homes.
“These ongoing delays, coupled with the backlog in local authority reviews compounded the financial pressure, creates a bottleneck that hinders developers at every stage of the process.
“When a scheme stalls, purchasers are faced with high levels of uncertainty. Picking up part-completed works is rarely straightforward, warranties often can’t be transferred. The quality and standard of previous construction is often unclear and the cost to complete is difficult to assess. Title issues can also emerge, making the sale process longer and more complex.”
The trend is already playing out on the ground. Landwood have recently concluded the sales of part-complete developments in Liverpool, Scarborough and Grimsby.
These include 208 studio apartments scheme with commercial units, a Grade II listed building with consent for 50 homes and co-working space and a 4.6-acre site with permission for 13 houses.
James continued: “Part-complete sites are a high-risk purchase for any buyer and in many cases are hard to secure funding on, often requiring a cash buyer.
“That’s why experience matters. We’ve built a hard-earned reputation for connecting complex listings like this with serious buyers and delivering the best possible return for clients acting in the insolvency sector.”
In March, S&P Global’s Construction PMI reported the sharpest drop in activity since May 2020, driven by steep declines in housebuilding and engineering work.
