Throughout my time helping inventors develop a multitude of different projects, this conundrum has often reared its head.
It is important to say from the outset that there is no definitive answer, but I will aim to convey the alternative perspectives, to allow inventors to make an informed choice for themselves.
The opinions on this topic vary across professionals in the IP industry and the answer will differ depending on the specific idea.
Having said that, below are the main reasons for developing a prototype before patenting:

1. A patent application requires a certain level of detail regarding how the idea functions.
   This is known as 'sufficiency' or an 'enabling disclosure'.
   It is often easier to describe, and draw, an invention once a prototype has been created and tested.
   
2. Prototyping develops the idea and it may be that a new or better solution is achieved.
   Potentially these iterative developments could require altering the original patent application or filing a new application.
   This could cost more or result in advantageous changes being left unprotected.
   
3. The grace period before substantial fees and important decisions need to be made during the patenting process is quite short, considering the average time it takes to launch a new product onto the market.
   It could be argued that it is better to progress the idea as much as possible before filing the patent application, including finalising the design through prototyping.
   This would then allow the grace period to be used for manufacturing or licensing the product.
   
4. A prototype can be used to test the market and some people consider that it is best to do this before embarking on a potentially expensive patenting strategy.
   (Disclosing the idea can prevent a granted patent being achieved and legal advice should be taken on how to test the market without forfeiting potential patenting opportunities.
   Confidentiality agreements are one way of protecting an idea before a patent application has been filed.
   )
5. A prototype may prove that the idea is not viable therefore saving the cost and time involved in drafting and filing a patent application.
   

Conversely, below are the main reasons to file a patent application before prototyping:

1. Prototypes often need to be produced by companies and therefore it could be wise to file for the patent first to protect the intellectual property.
   
2. If the inventor waits for the prototype to be produced before filing the patent application, someone else may file an application for the same idea first.
   In many countries of the world, including the UK, the patents systems are 'first to file' and not 'first to invent'.
   
3. The patent application process includes a thorough worldwide novelty and inventiveness search by the UK IPO that could reveal valuable prior art material, not only in terms of the direction the prototype should take, but also in terms of potential infringement issues whereby the prototype can then be designed around existing patents.
   
4. A patent application and the resulting patent, like all intellectual property, provides an asset which is owned by the inventor or applicant company.
   If prepared effectively, the patent can be licensed or sold to generate an income stream potentially without ever needing to produce the prototype.
   
5. It may be better to start with a patent application if funds are limited, as a patent application is generally cheaper than a prototype.
   
6. A 'provisional' patent application can be filed without requiring great detail, providing a follow up application is then filed within 12 months which describes the idea in more detail.
   This may be following the proof of concept provided by the prototype.
   

There are some ways round these issues.
Prototyping manufacturers can be asked to sign a confidentiality agreement before the idea is disclosed.
However bear in mind that many companies will not sign confidentiality agreements, since their in-house departments might be working on similar ideas.
Pre-application patent searches can be carried out prior to prototyping or patenting to discover whether it is sensible to proceed without having to draft and file an application.
There is a third perspective for consideration.
Some industry experts would suggest that it's not a patent or prototype that should come first but the opinion of industry experts as to whether the idea is viable and will sell.
They would argue that the prototype and patent are important parts of the process but, at the very beginning, it's best to ascertain that there is actually a market before investing in either a patent or prototype.
In conclusion, the best way to proceed with any new product idea is a complex decision.
If the novel functionality of the idea is unproven, then a prototype may be a sensible first step.
It is worth ensuring that a reputable company is used to produce the prototype and that a confidentiality agreement is signed prior to the concept being revealed.
Alternatively, the inventor may choose to file a patent application first and accept that additional cost may be incurred to re-file or amend the application as the project is developed.