The research revealed that 23% of developers cite house price growth as their primary concern, closely followed by the challenge of obtaining planning permission (22%).

Other key concerns include cost-of-living pressures on buyers (21%), sustainability and ESG commitments (21%), and difficulties accessing skilled labour and talent (20%).

The respondents also reported high mortgage rates (19%), rising material costs (18%), and limited government support for first-time buyers (18%) as obstacles.

As a result of these pressures, 99% of developers have made strategic adjustments to their business plans.

The most prevalent change is altering the type of properties they build, a step taken by more than a third (35%) of respondents.

Shawbrook’s research demonstrated how developers are pivoting strategies in several ways, with 33% reconsidering their geographical focus and 27% exploring different construction methods or materials.

27% of respondents are delaying the commencement of new projects, while a concerning 25% said they may be forced to cease trading altogether.

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On top of these challenges, developers are bracing for sharp cost increases, with 30% predicting an average rise of 35% in costs over the next 12 months.

Terry Woodley, managing director of development finance at Shawbrook, commented: “Our research highlights the challenges currently confronting developers and the wider housebuilding industry in general.

“Rising costs, planning hurdles and market uncertainty have created a perfect storm which has been exacerbated by fluctuating house prices.

“However, despite the headwinds of the past 12 months, there’s still plenty of reason for optimism.

“Recent government announcements, such as the Planning & Infrastructure Bill, could help cut red tape and accelerate progress, paving the way for increased housebuilding.

“Despite challenges, developers have shown remarkable agility, adapting their strategies to remain robust and profitable in a tough environment.

“One thing is clear: to overcome current barriers and make real inroads towards the government’s housebuilding targets, a collaborative, multi-pronged approach is essential.”