Figures on house price movements, completions, labour shortages, material costs — the list is endless.

The development sector is often presented as one monolithic bloc but in truth, is a sector that includes a diverse range of businesses of different sizes and specialities whose day-to-day experiences are simply not reflected in catch-all statistics.

The situation facing large housebuilders is not necessarily the same as that facing specialist developers.

The cost considerations they operate under can be significantly different, and so can the projects they undertake.

A mass development of over 300 properties is not the same as a bespoke development of 20-40 new homes, and general statistics will struggle to tell the difference.

Whilst a developer undertaking the large project will be looking to achieve a higher return, the profit margin percentages they aim to achieve per unit can be far smaller than that of the bespoke housebuilder.

If costs are to rise — as we have seen happen over recent years — then their profit margin percentage can be substantially reduced, and the viability of a development can be called into question.

For the specialist developer with wider profit margins, while a rise in costs and labour is never welcome news, it is also not necessarily a reason to postpone a project.

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They are in a position where increased costs can be more readily absorbed, allowing them to still see a satisfactory — albeit lower — return on their investment.

High-quality, energy efficient, new-build homes have never gone out of fashion, as rather than retaining value, they’ve often seen steady rises — further reducing the impact of cost increases the developer may have incurred.

The difference between these two concurrent scenarios cannot be reflected in catch-all data.

A downturn in the fortune of large-scale developers will distort statistics to an extent that it will seem the entire development sector is facing the same problems, even though bespoke developers could at the same time be achieving satisfactory profits.

That is not to say there are challenges that do not impact both the specialist and the large-scale housebuilders.

Planning approval remains a significant problem, with little being likely to change in the near future to ease the problem, but specialist developers still have greater flexibility in general.

With differences in the projects they undertake, the profit margins they need to achieve, and the flexibility their size affords them, it is essential to look beyond headline sector figures to see the true position of specialist developers.

Paragon’s development finance team understands these differences and can provide clients with financing solutions that reflect the position and conditions they face.

Macroeconomic statistics do not reflect their needs, and neither will products designed for the macroeconomic market.