The commercial mortgage and bridging finance sector is urging the next Prime Minister to implement significant planning reforms and provide support for landlords. This call comes as the industry faces challenges from planning delays and tax policies that hinder investment in commercial and mixed-use properties, impacting the overall housing supply.
What Planning Reforms Are Needed?
According to Karen Rodrigues, sales director at TAB, the next Prime Minister should prioritise a refreshed planning system that includes statutory deadlines and enhanced local authority resources. Rodrigues advocates for a presumption in favour of converting redundant commercial spaces, which would streamline the approval process for change-of-use applications. This reform is seen as essential for transforming vacant retail and office units into viable mixed-use developments.
How Does This Affect Landlords and Investors?
Landlords are currently facing a challenging environment, with policies that have historically treated them primarily as revenue sources for taxation. Rodrigues argues that the government must recognise the critical role of the private rented sector (PRS) in meeting housing demand. She suggests reinstating mortgage interest tax relief for individual landlords, eliminating the stamp duty surcharge, and reviving the Wear and Tear Allowance. Such measures could alleviate financial pressures on landlords and encourage further investment in the rental market.
What Changes Are Suggested for Business Rates?
In addition to planning reforms, Rodrigues calls for a revision of business rates, which she claims are a significant burden on high streets and mixed-use investments. By reducing rates for independent retailers and hospitality businesses, the government could stimulate local economies and support tenants in semi-commercial properties. This would not only help rejuvenate high streets but also create a more conducive environment for businesses to thrive.
What This Means for Bridging Finance
Bridging finance plays a vital role in facilitating quick funding for regeneration projects and property developments. However, the current slow pace of the planning system is a major obstacle. TAB emphasises the need for a planning system that allows for faster approvals, which would enable investors to move forward with projects that can enhance community development and economic growth. With these reforms, bridging finance could see increased demand as investors seek to capitalise on new opportunities.
Frequently asked questions
What is bridging finance?
Bridging finance is a short-term loan designed to bridge the gap between the need for immediate funding and the availability of longer-term financing. It is often used in property transactions to secure funding quickly.
How can planning reforms impact property investment?
Effective planning reforms can streamline the approval process for property developments, making it easier for investors to undertake projects. This can lead to increased investment in housing and commercial properties, ultimately enhancing supply and supporting economic growth.