The commercial mortgage and bridging finance sector is calling for significant planning reforms and support for landlords from the next UK Prime Minister. As the housing supply crisis continues, industry leaders argue that practical changes are essential to stimulate development and support property investors.
What Planning Reforms Are Needed?
Industry experts highlight that the current planning system is a major barrier to development. Karen Rodrigues, sales director at TAB, emphasises the need for a refreshed planning framework that includes statutory deadlines and enhanced local authority resources. These changes would facilitate quicker approvals for change-of-use applications, enabling the conversion of vacant commercial properties into mixed-use developments. This is particularly important as the demand for housing continues to rise, and the existing planning processes are seen as cumbersome and slow.
How Will This Impact Landlords?
Landlords are facing increasing pressure to meet housing demand, especially as social housing supply remains insufficient. Rodrigues argues that the private rented sector (PRS) plays a vital role in bridging this gap. However, she points out that successive governments have often viewed landlords primarily as a source of tax revenue rather than as essential contributors to housing supply. The proposed reforms include reinstating mortgage interest tax relief for individual landlords, scrapping the stamp duty surcharge, and bringing back the Wear and Tear Allowance. These measures would alleviate some of the financial burdens on landlords and encourage further investment in rental properties.
What Are the Proposed Changes to Business Rates?
In addition to planning reforms, there are calls for changes to business rates, which are seen as a significant obstacle for independent retailers and hospitality businesses. Lowering business rates could support high streets and tenants occupying semi-commercial properties. Rodrigues suggests that reducing rates for local service providers would help rejuvenate struggling high streets and stimulate economic activity in these areas.
What This Means for Bridging Finance
For those involved in bridging finance, the proposed reforms could lead to increased lending opportunities as the market responds to a more streamlined planning process. With quicker approvals for developments, investors may find it easier to secure funding for projects that contribute to housing supply. The current friction in the property market, exacerbated by high stamp duty rates, could also be alleviated, making transactions more viable for property investors and landlords alike. This shift could ultimately enhance the overall health of the property market and encourage more active participation from investors.
Frequently Asked Questions
What specific reforms are being requested for planning?
Experts are calling for a refreshed planning system with statutory deadlines, more resources for local authorities, and a presumption in favour of converting redundant commercial spaces into residential units.
How will changes to business rates affect landlords?
Lower business rates could reduce costs for independent retailers and hospitality businesses, supporting tenants in semi-commercial properties and potentially boosting foot traffic and economic activity in high streets.