Development lending reached £276.5 million during Q1, down from £420.3 million in the previous quarter, while second charge lending stood at £131.3 million, compared with £145.8 million in Q4 2025.
A sector in transition
The BDLA said the Q1 figures should be read against the backdrop of the market’s rapid expansion over recent years, a more cautious property finance environment, and ongoing economic and geopolitical uncertainty, rather than as a signal of structural weakness.
Adam Tyler, chief executive of the BDLA, said the softening was not unexpected given wider conditions.
“After a sustained period of strong growth, it is not surprising to see the market move into a more measured phase,” Tyler said. “The first quarter of 2026 has been shaped by a number of wider economic and global factors, and these have inevitably influenced confidence and activity across the property and mortgage sectors.”
He added that brokers, lenders and borrowers all had to navigate uncertainty around rates, property values, transaction volumes and the broader economic outlook over the past 12 months.