What actually changed#
For most of 2024 and 2025, the development debt market behaved as if the next cut was always one quarter away. Senior LTGDV ratchets quietly tightened. Stretched-senior went into hibernation. Mezzanine providers raised hurdle IRRs even as deployment slowed.
The Bank's May statement broke that posture. It was not the size of the move that mattered — it was the shape of the forward guidance. Two of the three lenders we placed schemes with last week have now reissued term sheets at sharper pricing within the same week.
Take of the day
“Senior pricing has moved 60–90 bps since February across our panel.”
Where the appetite is re-emerging#
Three patterns are repeating across our placements. First: stretched-senior at 72–75% LTGDV is being offered again on schemes where the sponsor has delivered at least one comparable project in the same submarket.
Second: clearing banks are re-engaging on £30m+ tickets where pre-sales sit above 35%. Third: family-office mezz capital is bidding aggressively for the 75–85% LTC strip — but only against full QS-monitored cost plans.
The orchestration angle#
Sponsors who treat this as a refinance moment rather than a pricing moment will out-perform. The schemes that get away cleanly in the next two quarters will be the ones where senior, mezz and equity are restructured together — not bolted on sequentially.
Our development desk is rebuilding capital stacks in parallel: one term sheet, one legal process, one drawdown schedule. The cost saving versus sequenced refinancing is typically 110–180 bps of blended cost of capital across the build.