The commercial mortgage and bridging finance sector is calling for urgent planning reforms and support for landlords from the next Prime Minister. The TAB Group, a specialist finance lender, argues that these changes are essential to enhance housing supply and facilitate regeneration projects across the UK.
What Planning Reforms Are Needed for Bridging Finance?
Karen Rodrigues, sales director at TAB, has highlighted planning reform as a critical issue that the next Prime Minister must address. She emphasizes the need for a refreshed planning system that includes statutory deadlines and increased local authority resources. This would enable quicker approvals for change-of-use applications, particularly for converting vacant retail and office spaces into mixed-use developments. Rodrigues argues that while the sector can provide commercial mortgages rapidly, the sluggish planning process hampers progress for businesses and investors.
How Will This Impact Landlords and Bridging Finance?
According to TAB, the private rented sector (PRS) plays a vital role in meeting the UK’s housing demand. Rodrigues urges the next government to support landlords, arguing that they are essential until more social housing is delivered. She criticizes past administrations for treating private landlords merely as a source of tax revenue and calls for the removal of excessive regulations that hinder investment. Proposed measures include reinstating mortgage interest tax relief for individual landlords and abolishing the stamp duty surcharge, which she believes would encourage more investment in the rental market.
What Changes Are Suggested for Business Rates Affecting Bridging Finance?
Rodrigues also advocates for reforming business rates, suggesting that lower costs for independent retailers and hospitality businesses would support high streets and tenants in semi-commercial properties. By reducing the financial burden on local businesses, the government could help rejuvenate struggling high streets, which are essential for community vitality. This aligns with TAB’s goal of creating an environment conducive to local business growth and investment.
What This Means for Property Investors and Bridging Finance
For property investors, the proposed reforms could significantly reduce transactional friction in the market. Rodrigues points out that high stamp duty rates often make otherwise viable deals unfeasible. By lowering stamp duty rates on commercial and mixed-use acquisitions or providing reliefs for bringing vacant buildings back into use, the government could create a more attractive investment market. This would not only benefit landlords but also encourage broader investment in the property market, ultimately supporting economic growth. Investors should keep an eye on these developments, as they could shape the future of bridging finance opportunities.
Frequently Asked Questions
What is bridging finance?
Bridging finance is a short-term loan used to bridge the gap between purchasing a new property and selling an existing one. It is often used in property transactions to secure quick funding.
How can landlords benefit from the proposed changes?
Landlords could benefit from reduced tax burdens and streamlined planning processes, making it easier to invest in and manage rental properties, thus enhancing their profitability and supporting housing supply.