The commercial mortgage and bridging finance sector is urging the next Prime Minister to implement significant planning reforms and provide support for landlords. With current tax policies and planning delays hindering investment in commercial and mixed-use properties, the sector believes that practical changes could enhance housing supply and stimulate economic growth.
What Planning Reforms Are Needed?
Industry leaders are calling for a revamped planning system that includes statutory deadlines, increased resources for local authorities, and a presumption in favour of converting unused commercial spaces. These measures aim to expedite the approval process for change-of-use applications, allowing vacant retail and office units to be transformed into mixed-use developments more efficiently. The current slow pace of the planning system is seen as a significant barrier to economic activity, with stakeholders advocating for reforms that can unlock regeneration projects.
How Will This Impact Landlords?
As the demand for housing continues to rise, the private rented sector (PRS) is viewed as a critical component in meeting this need. The call for reform includes a plea for government support for landlords, who have been increasingly burdened by tax policies that treat them primarily as revenue sources. Advocates are pushing for the reinstatement of mortgage interest tax relief for individual landlords, the removal of the stamp duty surcharge, and the revival of the Wear and Tear Allowance. These changes could significantly alleviate the financial pressures on landlords and encourage investment in rental properties.
What Changes Are Suggested for Business Rates?
Another area of focus is the reform of business rates, which are seen as a significant obstacle for independent retailers and hospitality businesses. Lowering business rates could help rejuvenate high streets and support tenants in semi-commercial properties, fostering a more vibrant local economy. Stakeholders argue that policies aimed at reducing rates for small businesses would not only benefit landlords but also enhance the overall attractiveness of mixed-use investments.
What This Means for Bridging Finance
The bridging finance sector stands to gain from these proposed reforms. By streamlining the planning process and reducing tax burdens, more investors may be encouraged to enter the market, leading to increased demand for bridging loans. This type of finance is often important for property developers looking to quickly secure funding for projects that may otherwise be delayed by bureaucratic hurdles. As the market evolves, stakeholders should monitor how these proposed changes could reshape the market for bridging finance and property investment.
Frequently asked questions
What is bridging finance?
Bridging finance is a short-term loan used to bridge the gap between the purchase of a new property and the sale of an existing one. It is often used in property transactions to secure funding quickly.
How can planning reforms affect property investment?
Planning reforms can streamline the approval process for property developments, making it easier and faster for investors to undertake projects. This can lead to increased investment in the property market and a boost in housing supply.