The call for planning reform and enhanced support for landlords has intensified as the next Prime Minister prepares to take office. The specialist finance sector, particularly bridging finance, is poised to play a significant role in addressing the housing supply crisis, but current planning delays and tax policies are hindering investment in commercial and mixed-use properties.
What are the key issues facing the property market?
According to Karen Rodrigues, sales director at TAB, the primary challenge is the sluggish planning system, which is impeding the timely approval of development projects. The current framework lacks statutory deadlines and sufficient local authority resources, leading to lengthy delays. Rodrigues advocates for a reformed planning system that favours the conversion of unused commercial spaces into mixed-use developments, which would stimulate economic growth and community regeneration.
How can planning reform impact bridging finance?
Bridging finance is often used to expedite property transactions and development projects. However, the slow pace of the planning process can undermine the effectiveness of this financial tool. By introducing a more efficient planning system, the government could enhance the role of bridging finance in facilitating quicker project completions. This would not only benefit developers and investors but also help address the pressing housing supply challenges faced across the UK.
What support do landlords need from the government?
Landlords have been increasingly viewed as a source of tax revenue rather than essential contributors to the housing market. Rodrigues calls for the reinstatement of mortgage interest tax relief for individual landlords, the elimination of the stamp duty surcharge, and the revival of the Wear and Tear Allowance. These changes would alleviate some of the financial burdens on landlords, enabling them to continue providing rental housing in a time of high demand.
What this means for landlords and property investors
For landlords and property investors, the proposed reforms could significantly alter the market of the rental market. With the government potentially easing tax burdens and streamlining planning processes, landlords may find it easier to manage their properties and invest in new opportunities. This shift could lead to an increase in housing supply, helping to meet the growing demand for rental properties, especially in urban areas where housing shortages are most acute.
Frequently asked questions
What reforms are being proposed for the planning system?
The proposed reforms include introducing statutory deadlines for planning approvals, enhancing local authority resources, and promoting the conversion of redundant commercial spaces into mixed-use developments.
How would changes in tax policy benefit landlords?
Changes such as reinstating mortgage interest tax relief, removing the stamp duty surcharge, and reviving the Wear and Tear Allowance would reduce financial pressures on landlords, allowing them to continue providing rental housing more sustainably.