The commercial mortgage and bridging finance sector is calling for urgent planning reforms and enhanced support for landlords from the next Prime Minister. With the current system hindering investment in commercial and mixed-use properties, industry leaders believe that practical changes are essential to stimulate housing supply and regeneration projects across the UK.
What Planning Reforms Are Needed?
Karen Rodrigues, sales director at TAB, emphasised the need for a refreshed planning system that includes statutory deadlines and improved resources for local authorities. She 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 critical as it would enable quicker transformations of vacant retail and office units into mixed-use developments, thereby addressing the pressing housing shortage.
How Will These Changes Impact Landlords?
Landlords play a pivotal role in the UK housing market, particularly in the private rented sector (PRS). Rodrigues argues that the government must support landlords, especially as the demand for housing continues to rise. She criticises past administrations for viewing landlords primarily as a source of tax revenue rather than as essential contributors to housing supply. Key proposals include reinstating mortgage interest tax relief for individual landlords, scrapping the stamp duty surcharge, and reviving the Wear and Tear Allowance.
What Does This Mean for Bridging Finance?
Bridging finance is increasingly vital for investors looking to capitalise on property opportunities. However, the current planning delays are a significant barrier. Rodrigues notes that while TAB is capable of delivering commercial mortgages rapidly, the sluggish planning process hampers potential projects. By reforming the planning system, the government could unlock new opportunities for bridging finance, facilitating quicker access to funds for property development and regeneration.
What Should Investors Watch For?
Investors should keep a close eye on the upcoming government policies regarding planning and taxation. The proposed reforms could significantly influence the viability of property investments, particularly in the commercial sector. Changes to business rates are also on the agenda, with calls for reductions that would benefit independent retailers and hospitality businesses, which in turn would support tenants in semi-commercial properties. Investors should prepare for potential shifts in the regulatory environment that could either enhance or hinder their investment strategies.
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 funding is needed.
How can planning reforms affect property investments?
Planning reforms can expedite the approval process for developments, making it easier for investors to convert properties and initiate new projects, thereby enhancing the attractiveness of property investments.