Many may remember the era of ‘survive to 2025’ — the idea that if you made it to this year you’d be on track for sunnier uplands. While we haven’t seen any clouds clear this year, we’ve certainly got used to them being there and we’ve seen a significant uptick in deal flow and opportunities from developers across residential, PBSA and care.

Some cautiousness on the developer side has lifted and we’ve seen an increase in both scale and quantity of deals across our desk — making it the best year for deal flow at Atelier ever.

We’ve responded to the needs of developers during a difficult year by launching higher day-one advances to make equity work harder. We re-engineered our financing model to launch our ‘Better Day One Funding’ initiative — bridging the equity gap and helping developers get projects off the ground quicker.

Our pipeline is the strongest we’ve ever had, and we’ve doubled the size of our originations team in response to more confidence and opportunity. The situation facing projects on the ground, however, is a little more complex.

Time kills deals

A recurring trend this year has been developers seeking finance at a much earlier stage of the procurement process and that, combined with longer lead times on professional reports, is having a knock-on effect for transaction times. On average, transaction times have doubled, which means to get the same result, you have to have double the pipeline. This is a real source of frustration for the market. It’s a well-known fact that time kills deals. The market moves quickly even if deals move slow — appetite from lenders, developers and valuations will inevitably change, making for a messy and complex market for financing.

Faltering confidence

As 2025 draws to a close, Reeves’ Autumn Budget cast a cloud of uncertainty over Q3 and Q4. Buyers have been in stasis waiting for clarity from the government and we can only hope that they will bounce back quickly in 2026 to kickstart that all-important demand-side stimulation for the housing market.

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The constant carousel of Housing Ministers has added to the uncertainty — distracting industry and government during a crucial time for housebuilding. While big ticket policy changes from the government have been well-intentioned, we are yet to see the impact of these lofty promises on the ground.

Regulatory obstacles

We need a radical approach from policymakers to clear the way for developers. The regulatory burden, planning delays and additional costs have simply grown unsustainable. A reduction in affordable housing quotas, Community Infrastructure Levies (CIL) and Section 106 requirements are all on-the-ground fixes that can un-burden developers - as opposed to lofty policy promises that we won’t feel the effects of for years to come.

As an industry, we have been banging the drum for expediting the planning process for years now. Yet still, environmental regulations, delays in local authority approvals, and complex, lengthy investigations are driving up delays and costs for the very developers with the potential to help the government hit its housebuilding targets. As it stands, striving for 1.5 million new homes is another government pipe dream. Not to mention the vast number of sites already approved for planning but being held back by further regulatory barriers and viability issues.

Growing markets

PBSA and the care sector have huge potential to thrive in 2026. The country’s aging population is no secret, and it is time to take the shackles off and allow the care sector to ramp up development to meet demand. Recent data from Knight Frank revealed that while bed supply has only grown 2.9% over the last decade, the over-65 population has grown by approximately 20.7% over the same period, demonstrating the deficit in supply growth.

Due to regulatory squeezes, care homes are closing at a faster rate than they can be opened. With a projected 20,000 bed shortfall by 2050, there is significant market opportunity to fast-track care development in 2026. We can also expect to see positive activity for PBSA. From a financing perspective, providers are likely to embark on significant refurbishment of Gen One sites to upgrade them in line with modern PBSA standards and bring them quickly back to market in 2026/7.

Ecosystem reliance

As ever, no asset class exists in isolation. The strength of later living inevitably depends on the strength of the residential market. Care costs are generally funded by sale or equity release from the primary main residence, so we need to see significant transactional activity and confidence across the market for the ecosystem to survive.

While 2025 hasn’t been the turning point we hoped it would be, significant deal flow, policy progress and growing asset classes will hopefully stimulate market activity into 2026.