The commercial mortgage and bridging finance sector is calling for urgent planning reforms and landlord support from the next Prime Minister. TAB, a prominent commercial mortgage and bridging lender, emphasizes that the current planning delays and tax policies are hindering investment in commercial and mixed-use properties, which are essential for increasing housing supply.
Why is Planning Reform Necessary for Bridging Finance?
Karen Rodrigues, sales director at TAB, argues that the planning system is currently too slow, creating significant barriers for businesses and investors. She advocates for a reformed planning framework that includes statutory deadlines and enhanced local authority resources. This would facilitate quicker approvals for change-of-use applications, allowing vacant retail and office spaces to be transformed into mixed-use developments. Such reforms are seen as vital for unlocking projects that can regenerate communities and stimulate economic growth.
How Do Current Tax Policies Impact Landlords?
Rodrigues points out that private landlords play an important role in addressing housing demand, especially in the absence of sufficient social housing. However, she criticizes successive governments for treating landlords primarily as a source of tax revenue. She calls for the reinstatement of mortgage interest tax relief for individual landlords, the elimination of the stamp duty surcharge, and the revival of the Wear and Tear Allowance. These changes are considered essential for creating a more supportive environment for landlords, enabling them to contribute more effectively to the housing market.
What Changes Are Needed for Business Rates?
The current business rates system is seen as a significant burden on high streets and mixed-use investments. Rodrigues advocates for reforms that would lower costs for independent retailers and hospitality businesses, thereby supporting tenants in semi-commercial properties. By reducing business rates, the government could help rejuvenate high streets, making them more attractive to both consumers and investors.
What This Means for Investors and Bridging Finance
For landlords and property investors, the proposed changes could lead to a more dynamic property market. With faster planning approvals and reduced tax burdens, investors would have greater flexibility to undertake projects that convert vacant properties into viable residential or mixed-use spaces. The anticipated reforms could also enhance the appeal of bridging finance as a solution for quick funding needs, particularly in regeneration projects. For more information on how bridging finance can be utilized, check out our bridging finance guide.
Frequently Asked Questions
What is bridging finance?
Bridging finance is a short-term loan typically used to bridge the gap between immediate funding needs and longer-term financing solutions. It’s often used in property transactions to secure funding quickly.
How can I apply for a bridging loan?
To apply for a bridging loan, you typically need to provide details about the property, your financial situation, and your plans for the property. It’s advisable to consult a mortgage broker to find the best options available.