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 leading commercial mortgage and bridging lender, highlights that current planning delays and tax policies are hampering investment in commercial and mixed-use properties, which are vital for housing supply and regeneration projects.
What Planning Reforms Are Needed for Bridging Finance?
Karen Rodrigues, sales director at TAB, emphasizes the need for a refreshed planning system that includes statutory deadlines and better resourcing for local authorities. She argues that a presumption in favour of converting redundant commercial spaces into residential units could significantly expedite the approval process for change-of-use applications. This would facilitate quicker transformations of vacant retail and office units into mixed-use developments, addressing the urgent need for housing.
How Do Current Tax Policies Affect Landlords and Bridging Finance?
Rodrigues points out that the private rented sector (PRS) plays an important role in meeting housing demand, especially as social housing delivery lags. However, she criticizes successive governments for treating landlords primarily as a source of tax revenue. She advocates for the reinstatement of mortgage interest tax relief for individual landlords, the removal of the stamp duty surcharge, and the return of the Wear and Tear Allowance. These changes aim to alleviate the financial burden on landlords, enabling them to contribute more effectively to the housing market.
What Changes to Business Rates Are Proposed?
In addition to planning and tax reforms, TAB is calling for a review of business rates. Rodrigues suggests that reducing rates for independent retailers and hospitality businesses can help rejuvenate high streets and support tenants in semi-commercial properties. By lowering these costs, the next government could create a more conducive environment for local businesses, which would, in turn, benefit the overall property market.
What This Means for Landlords and Investors in Bridging Finance
For landlords and property investors, these proposed reforms could mean a more streamlined process for property conversions and a reduction in tax burdens. The emphasis on planning reform could lead to faster project approvals, allowing investors to capitalize on opportunities more quickly. Furthermore, a supportive environment for landlords could enhance the attractiveness of the PRS, potentially increasing rental yields and property values. Investors should keep an eye on the upcoming government policies and reform proposals, as these will likely have a significant impact on the bridging finance market. For more information on bridging finance options, check our bridging finance guide.
Frequently Asked Questions
What are the main benefits of planning reform for property investors?
Planning reform could lead to quicker approvals for property conversions, allowing investors to capitalize on opportunities faster and potentially increasing the supply of housing.
How would tax policy changes affect landlords?
Changes such as reinstating mortgage interest tax relief and removing the stamp duty surcharge would reduce financial burdens on landlords, making it easier for them to maintain and invest in their properties.