Rising costs, tighter margins and increasing regulatory requirements are making it more difficult than ever to bring forward viable development schemes.
Against this backdrop, Stephens Scown welcomed property professionals from across the South West to its Exeter office on 16 June 2026 for a seminar exploring development finance, risk and viability – and, crucially, what developers, landowners and funders can do to keep projects moving.
With a second session held in Taunton, the event brought together developers, registered providers, landowners, agents, accountants and funders, alongside legal specialists from across our Property Division, to share practical insight on navigating an increasingly complex market.
A Joined-up Approach to Development
A clear theme throughout the session was that successful development now depends on early, joined-up decision-making.
From site acquisition and planning through to funding, construction and eventual delivery, development projects involve a range of interconnected considerations. Decisions made in one area can have significant consequences elsewhere, affecting viability, programme and risk.
Drawing on perspectives from planning, real estate, construction and property litigation, the discussion highlighted how these issues rarely arise in isolation. Instead, successful projects are often those where potential challenges are identified early and considered in the wider context of the development as a whole.
For clients, this means taking a strategic approach from the outset and ensuring that land, planning, funding and delivery considerations are aligned before significant costs are incurred.
Viability: address it early or risk delay later
Viability remains one of the defining challenges in the sector.
With build costs continuing to rise and additional obligations impacting scheme economics, many developments are under pressure before they even reach the planning stage. In some cases, the cost of delivering a new home has increased significantly, placing further strain on already tight margins.
The current planning policy position is clear:
- Viability should be front-loaded into the development strategy
- Policy compliance remains the starting point
- Late-stage viability arguments are unlikely to succeed except in exceptional circumstances
Recent appeal decisions reinforce this approach, particularly where developers have sought to revisit obligations after delivering profitable elements of a scheme.
The seminar discussion highlighted the practical tension between planning policy and land acquisition. Developers are often required to assess viability against fixed planning obligations after land values have already been agreed. Many schemes are now grappling with additional costs that were not anticipated when sites were acquired, including biodiversity net gain requirements, infrastructure contributions and increased construction costs.
At the same time, participants noted that landowners of allocated sites can often hold considerable negotiating power, making it challenging for developers to secure sites at values that fully reflect evolving policy and delivery obligations.
Key takeaway: viability cannot be treated as a fallback.
Developers should engage early with planning authorities and ensure that assumptions around costs, values and obligations are realistic from the outset.
Land Strategy and Deal Structure are Critical
In a more challenging market, how land is secured can be just as important as the site itself.
The seminar explored a range of structures – including conditional contracts, option agreements, promotion agreements and joint ventures – each offering different ways to balance risk, control and capital investment.
The right approach will depend on the nature of the project and the parties involved, but the consistent message was that land agreements should be structured with planning risk, funding requirements and delivery timelines firmly in mind. Building in flexibility at the outset can help parties respond to changing market conditions, evolving planning requirements and rising delivery costs.
Attendees also discussed the increasing focus on transparency in the land market. Alongside ownership, there is growing scrutiny of contractual arrangements that can give developers, promoters and investors influence over how land is brought forward for development. New reporting requirements for certain contractual control agreements are intended to provide greater visibility of who controls strategic land, reinforcing the importance of carefully documenting and managing these arrangements from the outset.
Key takeaway: a well-structured land deal can be just as important to a scheme’s success as securing planning permission or funding. The most effective arrangements are those that anticipate risk, retain flexibility and align the interests of all parties involved.
Funding: increasingly complex, increasingly important
Accessing the right funding remains a key challenge, particularly as schemes become more complex and margins tighten.
Developments are now often supported by a combination of funding sources, including:
- Debt finance
- Equity investment
- Grant funding (including Homes England)
- Vendor or deferred funding arrangements
While this creates opportunity, it also increases complexity. Funders are placing greater emphasis on certainty, risk management and robust legal structures.
Discussions during the Q&A highlighted that many funders continue to favour certainty of cost and delivery. While alternative procurement and management contracting models are becoming more common, lenders typically want to see strong contractual arrangements, clear cost controls and an effective framework for managing risk before committing funding.
Grant funders can be particularly focused on certainty. For some public sector and local authority-backed projects, there may be greater value in achieving a known and reliable project cost than pursuing potential savings that bring additional uncertainty.
Key takeaway: ensuring your scheme is “bankable” is essential.
This means having the right documentation in place – including professional appointments, building contracts and collateral warranties – and engaging with funders early in the process
Construction Risk: planning for cost volatility
Construction continues to be a major pressure point, with costs having increased significantly in recent years due to material price rises, labour shortages and energy costs.
In this environment, traditional fixed-price contracting is becoming more difficult to achieve – and, in some cases, may introduce additional risk.
Developers are increasingly:
- Exploring alternative contracting models
- Engaging contractors earlier
- Building in mechanisms to manage cost fluctuation
- Taking a more collaborative approach to risk allocation
The seminar explored how management contracting and other alternative delivery models are becoming more prevalent where fixed-price arrangements are either unavailable or prohibitively expensive. However, the shift in risk allocation remains a significant consideration for funders, who generally prefer certainty and will often require robust controls to mitigate exposure.
Key takeaway: flexibility and collaboration are key to managing construction risk.
In some cases, a pragmatic approach – including renegotiation where necessary – may be more effective than rigidly enforcing contract terms.
Managing Disputes Before They Arise
The seminar also highlighted the importance of considering potential disputes at the outset of a project, to avoid unnecessary costs and delays.
Clear and well-drafted contracts can reduce the risk of disputes and provide clarity and the path to resolution if disputes do arise. Where disputes cannot be avoided, alternatives to litigation – such as expert determination or arbitration – can offer more flexible and cost-effective solutions.
For clients, the focus should be on avoiding ambiguity within the contract, having clear dispute resolution provisions and obtaining advice early helping to avoid unnecessary delay and cost.
Supporting Successful Development in a Changing Market
The challenges facing the property sector are not new, but they are becoming increasingly complex. As viability pressures grow, funding structures evolve and regulatory requirements continue to expand, successful projects depend on seeing the bigger picture.
One of the key themes to emerge from the seminar was that development challenges rarely sit within a single discipline. Decisions relating to land, planning, funding, construction and risk management are closely connected, and considering them together at an early stage can help avoid delays, manage risk and improve project outcomes.
By bringing together specialists from across planning, real estate, construction and property litigation, Stephens Scown helps clients navigate these interconnected issues throughout the development lifecycle. This collaborative approach enables our advisers to provide practical, commercially focused guidance that reflects the realities of today’s development market.
Whether you are bringing forward a new development, reviewing the viability of an existing scheme or exploring funding and delivery options, early advice can help identify opportunities, manage risk and keep projects moving.
To discuss any of the issues raised during the seminar, please get in touch with a member of our Commercial Property Support team.
To hear what our attendees have to say about this event please click here.
To hear what our experts have to say about this event please click here.
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