The commercial mortgage and bridging finance sector is calling for urgent planning reforms and enhanced support for landlords from the next Prime Minister. TAB, a specialist finance provider, highlights that current planning delays and tax policies are hindering investment in commercial and mixed-use properties, which could otherwise help address the housing supply crisis.
What Planning Reforms Are Needed?
Karen Rodrigues, sales director at TAB, stresses that the next Prime Minister should prioritise a comprehensive overhaul of the planning system. She advocates for the introduction of statutory deadlines for planning applications, increased resources for local authorities, and a presumption in favour of converting vacant commercial properties into residential units. Such reforms aim to expedite change-of-use applications, facilitating quicker approvals for mixed-use developments.
How Will This Impact Landlords and Investors?
Landlords play a critical role in meeting the UK’s housing demand, particularly in the private rented sector (PRS). Rodrigues argues that the government must support landlords rather than viewing them solely as a source of tax revenue. 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 would potentially alleviate financial pressures on landlords and encourage further investment in rental properties.
What Changes Are Needed for Business Rates?
In addition to planning reforms, TAB is advocating for a review of business rates. Rodrigues points out that high business rates are a significant burden on high streets and mixed-use investments. She suggests that reducing rates for independent retailers and hospitality businesses could invigorate local economies and support tenants in semi-commercial properties. This approach aims to create a more conducive environment for local businesses to thrive, which is essential for the regeneration of high streets.
What This Means for Bridging Finance
The call for planning reform and tax relief measures has significant implications for the bridging finance sector. As TAB aims to accelerate lending processes, the current slow pace of the planning system undermines these efforts. By streamlining planning approvals and reducing transactional friction, more property deals could become viable, benefiting investors, landlords, and the overall economy. The bridging finance sector could thus play a pivotal role in funding regeneration projects, provided that the necessary reforms are implemented.
Frequently Asked Questions
What are the main challenges facing landlords today?
Landlords are currently facing challenges such as high taxation, strict regulations, and planning delays that hinder their ability to invest and expand their property portfolios.
How can bridging finance help in property development?
Bridging finance can provide quick funding solutions for property developers, allowing them to seize opportunities and complete projects while waiting for longer-term financing or planning approvals.