2025: a year where relationship-led lending took centre stage

If you looked only at the headline figures for UK development in 2025, you could be forgiven for thinking not much happened. Activity was muted in London and the South East. Schemes paused. Land decisions dragged out. Confidence ebbed and flowed with every Budget announcement and rate decision.

But for us at VM Finance, this has been anything but a “quiet” year.

It’s been a year of groundwork. Of deepening relationships. Of backing clients as they navigated a tougher market, and quietly positioning ourselves for the next phase of growth, particularly in Manchester and the wider North West.

Our business is not built on how many deals we can rush through in a good year. It’s built on the strength, depth and longevity of the relationships we hold through the entire cycle. That’s what creates legacies for our clients and long term financial wellbeing for everyone involved.

Let’s dig below the surface and look at what we’ve been doing in 2025 before looking towards all the excitement 2026 has on the horizon for us.

Renewing our NatWest funding line

Our relationship with NatWest started back in 2022. It was built on mutual trust, a shared understanding of the residential development market and a very aligned view of what “good” looks like when it comes to lending responsibly to SMEs.

There’s a good deal of harmony between what our clients look for and our bank. At VM Finance, we:

• Do our homework on deals
• Stay close to projects irrespective of market conditions
• Think in terms of portfolios,  pipelines and strategy, not isolated loans.

That is exactly the kind of behaviour that funding partners value. It’s also what our developer clients rely on when they are making decisions that will affect their businesses for the next five to ten years, not just the next quarter.

In addition to our VM Group funding, the renewed NatWest line gives us a solid platform to continue supporting experienced developers who want a lender that can move quickly, but will also still be there when the environment is less forgiving.

Stepping into open storage developments

Another highlight of 2025 has been our first open storage development reaching completion.

Open storage isn’t a sector we had historically focused on. It’s not the obvious box to tick in residentially lead lending strategy. But this is exactly where a relationship led approach comes into its own.

A client we knew well approached us with a scheme that sat outside our traditional comfort zone, but within our comfort level for the sponsor. We knew their track record. We understood their approach to risk and delivery. We could see the fundamentals of the asset class and the local demand story.

So we leant into the relationship and backed the project.

The result has been a highly successful scheme which has done exactly what it set out to do for the developer and for us. More importantly, it’s opened our eyes to the opportunities in this space. Since that first project we have:

• Completed a further open storage transaction, and
• Quoted on additional schemes that are now in various stages of progression.

We‘ve not suddenly become an “open storage lender” as a badge to stick on a slide deck. What we have done is expand the range of ways we can support strong sponsors who bring us well thought through propositions in sectors where demand is real and cash flows are robust.

Again, the entry point was not the asset type. It was the relationship.

Embracing Manchester and the North West

If there is one theme that runs through our thinking for the year ahead, it’s Greater Manchester.

Our first deal in the city dates back to 2019. Then the world turned upside down during the COVID years, and like everyone else we saw activity slow, especially on more complex or speculative schemes.

What’s been different since 2022 is the renewed energy in the market and our own determination to be more than a periodic presence. Throughout 2025 we have:

• Spent more time on the ground with clients and contacts
• Built up a clearer picture of sub markets and local dynamics
• Continued to back schemes that we believe in, even while some participants have stayed on the sidelines.

In spring, we worked with Place on the SME House Builder Conference, sponsoring the event while our own Andrew Evans spoke on a panel about how we can encourage SME developers to play a bigger role in responding to the housing crisis.

Another big moment this year was our summer event in Manchester in June. It was designed very deliberately as a relationship building exercise rather than a hard sell. The result has been exactly what we hoped for.

Off the back of that single event we have already:

• Completed two transactions with developers we deepened relationships with there
• Progressed another one or two live opportunities that grew directly from conversations in the room.

That level of traction has reinforced a conviction we’ve held for some time. If we are serious about being part of the fabric of the Manchester and North West development community, we need more than a diary of trips from the South East.

So in 2026 we will be putting our flag in the ground properly.

We’re planning a physical presence in Manchester with dedicated resource on the ground from Q1 2026. That will give our clients faster access, more face time and a lender who is genuinely embedded in the local market, not dialling in from afar.

MIPIM, Place and being in the room

Alongside Manchester, 2025 has also been a year where we’ve doubled down on the places where conversations that matter are happening.

Our MIPIM experience this year confirmed what we already suspected. There is real value in being consistently present at the events where developers, advisers, local authorities and funders come together to test ideas and shape the next wave of schemes.

We intend to keep that rhythm, including a continued commitment to attending with the Place North West delegation. MIPIM and other conferences like it offer up so many opportunities for small interactions with people we already know, and the chance encounters with those we don’t — both of which can be important stepping stones on the way to valuable working relationships.

For a relationship led lender, these events are perfect for strengthening relationships and starting new ones.

A tough year in the South East, but not a lost one

It would be disingenuous to pretend that 2025 has been a barnstorming year for residential development in London and the Home Counties.

The reality is:

• Many developers have been cautious about bringing forward new projects.
• Build cost pressures have not disappeared, even as some materials have stabilised.
• End buyer sentiment has been dented by the cost of living squeeze and higher mortgage payments.

What we haven’t seen, however, is widespread distress among the schemes we support. Where projects have gone ahead, they have generally done so on more considered terms, with experienced sponsors taking a realistic view on pricing, phasing and exit.

Through all of this, we’ve tried to be the sort of funding partner who helps clients think through their options, rather than simply saying “yes” in the good years and disappearing when things slow down.

Labour’s Budget has now given a bit more clarity. Interest rates have started to ease from the peaks we saw earlier in the cycle, and mortgage lenders are beginning to feed that through into slightly more competitive products for first time buyers. Exactly how far and fast that goes remains to be seen, but it’s at least movement in the right direction.

The fundamentals of the housing market haven’t changed. The UK still faces a significant supply shortage. Family housing remains in demand. The question for 2026 is not whether there is a market. It’s which developers will be ready to meet it.

The time for resilience, creativity and an end to fence sitting

If we had to pick a single word for our developer community this year, it would be resilience.

Over the past decade, many of our clients have traded through:

• Brexit
• COVID
• Rapid inflation and supply chain shocks
• A shifting planning and regulatory landscape.

Each time, the temptation to pause indefinitely has been real. Yet time and again, our most successful clients have adapted their product, reshaped their pipelines and found ways to keep building.

Our sense as we head into 2026 is that the extended period of “wait and see” is drawing to a close. The time for sitting on the fence is ending.

That doesn’t mean rushing headlong into any and every scheme. It means:

• Choosing opportunities with stronger fundamentals
• Designing homes that genuinely match how people are living now
• Building in a way that allows some flexibility as costs and values evolve.

Our job is to stand alongside those developers who are ready to move, providing the financial structure and support that allows them to do so with confidence.

The VM Foundation and Hurricane Melissa relief fund

One of the most encouraging parts of this year has had nothing to do with term sheets and everything to do with generosity.

At our Christmas party and through associated initiatives, our clients and contacts have rallied behind the VM Foundation and the Hurricane Melissa relief fund, supporting recovery and rebuilding work in Jamaica as well as all the good causes supported by the foundation.

For us, VM Finance has always been about more than balance sheets. Financial wellbeing is not just an internal phrase. It extends to the communities our team and our clients come from and care about.

By highlighting the work of the foundation in this year in review, we hope to do two things:

• Thank everyone who has contributed
• Keep attention on the long term nature of recovery efforts, which don’t end when the initial headlines fade.

A message of positivity and hope

Aside from all the important work milestones and achievements we strive for each year, December and Christmas is a time to spend with friends and loved ones, to cherish time together and celebrate each other.

So away from the deals, developments and work we’ve achieved this year, we want to send a festive message to you and yours this Christmas time. We hope you have a restful and memorable Christmas.

We’re looking forward to seeing you again the new year.

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