Half of SME property developers underestimate true cost of expansion
Britain’s medium-sized businesses – the “growth engine” of the economy – are scaling at pace, but many property developers say they were unprepared for the pressure that comes with expansion, according to new research from Shawbrook.
While the UK’s mid-market continues to outperform on productivity and job creation, the study highlights the human and financial strain that often sits behind that success. Nearly a quarter of developers (23%) reported moments of isolation during their scale-up journey and a fifth (20%) experienced higher stress levels as operational demands grew.
Many also invested heavily in their business’s potential. Nearly half (46%) used personal savings or remortgaged to fund growth, showing the extent to which founders are backing the future of the UK’s mid-market. And although 51% conceded that the financial risks were greater than expected, strong commercial performance followed: 38% reported that revenue growth eventually outpaced rising costs.
However, access to suitable scale-up finance remains a friction point. Nearly a third (30%) of property developers said they struggled to secure funding aligned to their growth stage, pointing to a gap in specialist financial support for medium-sized businesses – a part of the economy often too large for start-up schemes but too small for corporate banking.
Property developers highlighted several forms of support that would make scaling more sustainable, including:
- Help navigating regulation and/or compliance – 33%
- Decreases in national insurance – 32%
- Recruitment and/or talent acquisition support – 28%
- Access to tailored finance or funding – 27%
Terry Woodley, MD of Development Finance at Shawbrook, commented: “The property development industry is vital to the UK’s economic strength, and developers are clearly willing to back their ambitions with significant personal commitment. Their success shows what is possible when businesses scale well – but it also highlights where more tailored support could unlock even greater growth.
“With red-tape and a depleting workforce being the biggest barriers to property developers, it’s crucial that they are given support to continue scaling up, whether this is through legislative changes or funding opportunities. The industry continues to be ripe with potential, it just needs the proper tools to flourish.”