Development Exit Finance Market Outlook 2025–2026
The development exit finance market is evolving rapidly as developers adapt to longer sales cycles, tighter refinancing criteria, and changing lender behaviour. In 2025–2026, development exit finance is increasingly being used as a strategic tool rather than a reactive solution, allowing completed schemes to transition more smoothly into sales or long-term funding. Understanding the forces shaping the development exit finance market is essential for developers planning exits over the coming years.
Longer Sales Periods Driving Exit Demand
One of the most significant trends influencing the market is the lengthening of sales periods. Market uncertainty and affordability pressures have slowed transaction speeds across many asset classes, making rushed disposals less attractive. As a result, more developers are using exit finance to avoid extending development loans or accepting discounted offers. This has increased demand for exit facilities that align with realistic sales timelines rather than optimistic projections.
Increased Lender Competition
Lender competition within the exit finance space has increased as more specialist funders recognise the distinction between construction risk and post-completion risk. A wider range of lenders now offer tailored exit facilities, improving choice for experienced borrowers. This competition has led to greater flexibility in structure, clearer refinance pathways, and more nuanced underwriting for stabilised schemes.
Valuation-Led Lending Decisions
Valuation methodology is playing an increasingly central role in exit finance decisions. Lenders are placing greater emphasis on achieved sales, demonstrable demand, and comparable evidence when determining leverage and pricing. Schemes that can evidence traction are more likely to secure favourable terms than those relying on projected values alone. For an example of how valuation and timing interact in practice, see our London development exit finance case study.
Sustainability and ESG Considerations
Sustainability considerations are becoming more prominent within the development exit finance market. Energy-efficient schemes may attract preferential terms from some lenders, particularly where developments align with broader ESG objectives. While not yet universal, this trend is expected to strengthen, making sustainability a strategic consideration rather than a regulatory afterthought.
Regional Variations in Lender Appetite
Regional differences continue to shape exit finance outcomes. Liquidity, pricing, and lender appetite vary significantly by location and asset type. Urban apartment schemes, semi-rural residential developments, and mixed-use projects all experience different exit dynamics. Developers who understand these regional nuances can structure exit finance more effectively. For a case study focused on seasonal dynamics, see our Glasgow development exit finance case study.
How Underwriting Is Tightening Post-Completion
While competition has increased, underwriting standards have also become more disciplined. Lenders are scrutinising exit assumptions more closely, particularly around sales velocity, absorption rates, and income sustainability. Evidence is increasingly favoured over projections, especially for schemes outside prime locations or with mixed-use elements. Developers should expect greater focus on downside scenarios, including extended sale periods or slower leasing, when exit finance terms are assessed.
How Developer Behaviour Is Changing as Exits Slow
As exit timelines lengthen, developer behaviour is shifting. Rather than prioritising speed of disposal, many developers are now focused on preserving pricing and allowing schemes to mature post-completion where funding permits. Exit finance is increasingly being used to manage time rather than maximise leverage, with developers accepting slightly higher short-term costs in exchange for greater control and reduced execution risk. This shift has also led to more selective use of exit finance, with experienced developers favouring structured facilities that support phased sales or stabilisation rather than short-term fixes.
What Developers Should Plan for in 2026 Exits
Looking ahead, development exit finance is likely to remain a core component of funding strategies. Longer sales periods, valuation-led lending, and selective lender appetite are expected to persist. Developers who integrate exit finance into a broader funding plan, rather than treating it as a standalone solution, will be better positioned to adapt. For guidance on what typically follows exit finance, see our guide to post-development exit refinance strategies.
These trends reinforce the importance of structuring post-completion funding carefully, particularly where schemes require time to mature. For a full overview of how this funding is typically arranged, see our main guide to Development Exit Finance.
Speak to our Exit Finance Expert