The call for planning reform and enhanced support for landlords has intensified as the UK prepares for a new Prime Minister. TAB, a commercial mortgage and bridging lender, argues that the specialist finance sector could significantly contribute to housing supply and regeneration projects, yet is hindered by current planning delays and tax policies.
What Planning Reforms Are Being Suggested?
Karen Rodrigues, sales director at TAB, emphasises the need for a refreshed planning system that includes statutory deadlines and better resourcing for local authorities. She advocates for a presumption in favour of converting redundant commercial spaces, which would expedite change-of-use applications. This reform is essential as the current planning system is perceived to be moving too slowly, hampering the potential for businesses and investors to thrive.
How Will This Impact Landlords and Property Investors?
According to TAB, the private rented sector (PRS) is important for meeting housing demand, especially in light of insufficient social housing. Rodrigues argues that landlords should not be viewed merely as a tax revenue source but as vital contributors to the housing market. She calls for the reinstatement of mortgage interest tax relief for individual landlords, the removal of the stamp duty surcharge, and the reintroduction of the Wear and Tear Allowance. These changes could alleviate financial pressures on landlords, encouraging them to invest in and maintain rental properties.
What Changes Are Needed for Business Rates?
Rodrigues also highlights the need for reform in business rates, which she describes as a significant burden on high streets and mixed-use investments. Lowering rates for independent retailers and hospitality businesses could help rejuvenate local economies and support tenants in semi-commercial properties. The call for reform aims to create a more conducive environment for local businesses, which is essential for the vitality of high streets.
What This Means for Bridging Finance
Bridging finance plays a critical role in facilitating quick funding for property transactions, particularly in the context of regeneration projects. However, the current tax market and planning delays create friction in the property market, making transactions less appealing. TAB suggests that reforms, such as lowering stamp duty rates on commercial and mixed-use acquisitions, could stimulate activity in the property sector. By addressing these issues, the next Prime Minister could support a more dynamic market for bridging finance, ultimately benefiting landlords, borrowers, and investors alike.
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 where quick access to funds is needed.
How can planning reforms benefit property investors?
Planning reforms can streamline the approval process for property developments, making it easier for investors to convert commercial spaces into residential or mixed-use properties, thereby increasing supply and potential returns.