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Introduction
According to the Q2 2026 Home Builders Federation (HBF) and Quantum Development Finance (QDF) SME Developer Sentiment Survey, there has been a significant decrease in confidence from SME builders when compared with Q1 of 2026 where there was a reserved but optimistic outlook.
Headline figures show that 32% of property developers planned to increase their land purchasing activity in Q1 of 2026 and this has fallen to 18% in Q2. On the negative side, 27% of developers planned to decrease their land purchasing activity in Q1 and that has increased to 49% in Q2.
The figures for the planned construction of new homes has also seen a change in optimism levels. In Q1 of 2026, 41% of SME developers planned to increase their new home building output and this has fallen to 21% in Q2. Around 29% of developers planned to decrease their home building output in Q1 and that has now increased to 44% in Q2.
Even more striking is the dramatic loss in overall confidence in the housing market over the next 3 months. In Q1 of 2026, 28% of SME developers had a positive outlook and this has reduced to just 4% in Q2. Around 37% of developers had a negative outlook in Q1 and this has increased to an astonishing 75% in Q2.
The reason behind this huge downshift in planned activity and expectations of the UK housebuilding market is primarily due to impacts of the ongoing Iran conflict on the global and UK economy.
What Are The Biggest Impacts Of The Iran Conflict On SME Homebuilders
- Reduced buyer demand or slower sales – 62%
- Increased costs of certain materials – 61%
- Difficulty forecasting costs/increased business caution – 51%
- Higher energy costs – 35%
- Reconsidering/pausing acquisition of new sites – 26%
- Increased borrowing costs or tighter lending – 14%
- Forecasted fall in house prices – 13%
- Delays in receiving materials – 13%
- Need to source materials from alternative suppliers – 4%
Businesses, property developers and landlords looking to build, improve and renovate commercial and housing properties can seek grants and loans from local authorities to help with eligible costs. Council funding priorities permit funds being allocated first for improving empty homes or commercial units so they can be brought back into use, home improvement activity to improve living standards for existing tenants and conversion grants to change unused commercial premises into new housing dwellings.
What Are Some Of The Latest UK Property Development Grants Funding Opportunities Available?
i) Commercial Property Improvement Fund
Conwy County Borough Council is providing funding to enhance building frontages, bring vacant commercial floor space back into beneficial business use, or repurpose properties where appropriate, including conversion to retail, office space or food and drink venues. Funding up to £50,000 is available.
Application Deadline: Applications are invited on an ongoing basis
ii) Empty Property Grant
Wandsworth Council is providing grants for the owners of empty residential properties to repair and renovate their properties and make them available for rent. Funding up to £25,000 is available.
Application Deadline: Applications are invited on an ongoing basis
iii) Town and Village Regeneration Scheme
Isle of Man Government is providing financial assistance for external improvements and civic amenity projects, internal accessibility improvement projects, internal works to vacant business units, internal works to convert vacant units above town centre retail premises into residential premises and installation of payment or point of sale equipment in occupied premises. Funding up to £25,000 is available.
Application Deadline: Applications are invited on an ongoing basis
iv) Site Enabling Regeneration Fund Grant
East Dunbartonshire Council is providing a fund that aims to support the development of sites within regeneration locations such as Kirkintilloch Business Gateway and the Westerhill Regeneration Area. The Fund can also support redevelopment at locations which are identified within the Local Development Plan for business use and town centre sites. Funding up to £25,000 is available.
Application Deadline: Applications are invited on an ongoing basis
v) Empty Spaces Into Living Places
Conwy County Borough Council is providing grants towards the cost of renovating existing residential properties, or the conversion of commercial properties/empty spaces into residential accommodation. The grant can be used for properties in the Town Centres of Colwyn Bay, Llandudno or Abergele/Pensarn. Funding up to £25,000 is available.
Application Deadline: Applications are invited on an ongoing basis
vi) Renovation Grants For Landlords
East Suffolk Council is providing grants for landlords and owner-occupiers to bring properties in the Denmark Road area of Lowestoft up to the Decent Homes Standard. Eligible funding includes for empty homes or conversions where the home has been empty for more than 5 years. For occupied homes, up to 50% of the cost of remedying category 1 and high 2 hazards and structural repair works.
Funding up to £15,000 is available.
Application Deadline: Applications are invited on an ongoing basis
vii) Empty Property Grants
London Borough of Ealing is providing grants for landlords to repair and renovate properties that have been empty for six months or more. Grants can cover the following types of work – disrepair or structural issues, damp and mould growth, electrical rewiring, thermal upgrading such as windows, boiler work and insulation, improvements to kitchens or bathrooms and major health and safety hazards. Funding up to £15,000 is available.
Application Deadline: Applications are invited on an ongoing basis
viii) Empty Homes Grant and Loan Funding – Grants for Private Landlords
Argyll and Bute Council is running a scheme offering grants and loans for private landlords to repair and improve their empty properties and bring them back into residential use. Funding up to £7,500 is available.
Application Deadline: Applications are invited on an ongoing basis
How To Apply For UK Property Development Funding Schemes
Full details about how to apply for schemes and the eligibility criteria is available on each individual scheme page on the relevant website. Any deadlines, who can apply and what eligible costs the grants will cover will also be outlined on these pages. Interested individuals and businesses can speak to advisors based at each provider who can guide them through requirements and eligibility criteria to see if the relevant funding is a match with their needs and help them to apply. There are also application forms and other supporting guidance available on scheme pages as well.