The commercial mortgage and bridging finance sector is calling for urgent planning reforms and support for landlords from the next Prime Minister. TAB, a specialist finance lender, argues that current planning delays and restrictive tax policies are hindering investment in commercial and mixed-use properties, ultimately affecting housing supply.
What Planning Reforms Are Needed for Bridging Finance?
Karen Rodrigues, sales director at TAB, stresses the importance of a refreshed planning system with statutory deadlines and enhanced local authority resources. She advocates for a presumption in favour of converting redundant commercial spaces into residential units, which would streamline the approval process for change-of-use applications. Rodrigues points out that while TAB is ready to provide commercial mortgages quickly, the sluggish planning system hampers timely project execution.
How Do Current Tax Policies Affect Landlords and Bridging Finance?
According to TAB, the private rented sector (PRS) plays a vital role in addressing housing demand, especially as social housing supply remains insufficient. Rodrigues criticises successive governments for treating private landlords primarily as a source of tax revenue, rather than as partners in addressing housing shortages. 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 alleviate financial pressures on landlords and encourage further investment in the housing market.
What This Means for Landlords and Property Investors in Bridging Finance
For landlords and property investors, the proposed reforms could significantly alter the investment market. By streamlining the planning process and reducing tax burdens, the government could incentivise more investment in both residential and mixed-use properties. This would not only facilitate faster project approvals but also potentially lead to a more vibrant rental market, as landlords would be better positioned to meet demand. Additionally, reforms in business rates could lower costs for independent retailers and hospitality businesses, further supporting high streets and mixed-use developments.
What Changes Are Being Suggested for Business Rates?
Rodrigues also highlights the need for reforming business rates, which she claims are a significant obstacle for high streets and mixed-use investments. Lowering rates for independent retailers and hospitality businesses could help rejuvenate local economies and support tenants in semi-commercial properties. By creating a more favourable business environment, the next Prime Minister could support conditions that allow local businesses to thrive, ultimately benefiting the property market.
Frequently asked questions
What is bridging finance?
Bridging finance is a short-term loan used to bridge the gap between immediate funding needs and longer-term financing solutions. It is often used in property transactions.
How can planning reforms impact the property market?
Planning reforms can expedite the approval process for development projects, making it easier for investors to convert properties and increasing the overall housing supply.