The survey, carried out by UTB across brokers operating in the development finance industry, has found that while 23 per cent of brokers thought that first time buyer properties would offer the best potential for growth, 21 per cent concluded that family housing offered better prospects.

The least favourable sectors amongst brokers included luxury flats, retirement housing and eco-friendly developments.

Brokers were asked: ‘Which development sector has most potential for growth over the next three years?’

• 23 per cent said First Time Buyer properties;

• 21 per cent - Family housing;

• 15 per cent - One off individual homes;

• 14 per cent - Social housing;

• 8 per cent - Luxury family homes;

• 6 per cent - Eco friendly housing;

• 5 per cent - Luxury flats;

• 4 per cent – Retirement;

• 4 per cent – Other.

Despite a spit in opinion over the most promising sectors, 73 per cent of brokers expected their development business to increase over the next 12 months.

Over 40 per cent of brokers surveyed recorded between £1 million and £5 million of development finance business in 2011, and nearly a third placed over £5 million. 63 per cent also expected their 2012 business to exceed that undertaken in 2011.

Noel Meredith, Director at UTB, said: “The split in broker opinion is interesting and it’s easy to see why there’s an assumption that the first time buyer sector offers the best prospects for developers. There’s been a lot of publicity surrounding the need to kick start the FTB market and I suspect brokers believe that if developers can find a winning formula there’s a ready market for them. 

“However, the stumbling block could still be that younger buyers without substantial funds are barred from entering the property market or making the second step up the ladder because of the unrealistic demands from mortgage lenders for high percentage deposits. If 85 to 90 per cent mortgages become more freely available at competitive interest rates then brokers and developers may well see a surge in the FTB sector, but it’s far from guaranteed.”

He added: “Developers can find success in most sectors but they need to do their homework and demonstrate a very high level of local knowledge and expertise at matching the right product with the right buyers in the right locations. In today’s market the most important thing is to establish not just who wants a property but who can afford it, but that doesn’t mean ruling out luxury homes.

“High quality individual developments in sought-after locations can, in some ways, be recession proof, in that they are aimed at affluent buyers less affected by the ups and downs of the economy or a restricted access to mortgage funds. The target market may be smaller but it can still be profitable for developers able to produce a top quality product”.