The commercial mortgage and bridging finance sectors are urging the next Prime Minister to implement significant planning reforms and support for landlords. This comes as the industry highlights the pressing need for changes to the planning system and tax policies that currently hinder investment in commercial and mixed-use properties.
TL;DR: The specialist finance sector is advocating for urgent planning reforms and landlord support; these changes are essential for boosting housing supply and revitalising communities.
What Planning Reforms Are Needed?
Industry leaders are calling for a revamped planning system that includes statutory deadlines, increased local authority resources, and a presumption in favour of converting vacant commercial spaces. These reforms aim to expedite the approval process for change-of-use applications, making it easier to transform unused retail and office units into mixed-use developments. Karen Rodrigues, sales director at TAB, emphasised that while commercial mortgages are being processed quickly, the planning system is lagging, creating bottlenecks that stifle economic growth.
How Will This Impact Landlords?
The private rented sector (PRS) plays a vital role in addressing the UK’s housing demand, and industry experts believe the next government must offer more support to landlords. Rodrigues argues that landlords have been treated primarily as sources of tax revenue, which has led to policies that create unnecessary barriers. Proposed changes include reinstating mortgage interest tax relief for individual landlords, eliminating the stamp duty surcharge, and reviving the Wear and Tear Allowance. Such measures would alleviate financial pressures on landlords and encourage investment in rental properties.
What Changes Are Suggested for Business Rates?
Another area of concern is the current business rates system, which 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, thus supporting local economies and the tenants of semi-commercial properties. By reducing business rates, the government could stimulate activity in high streets, benefiting both landlords and local communities.
How Does This Affect Bridging Finance?
For property investors and borrowers, the proposed reforms could lead to a more dynamic and responsive market for bridging finance. Changes to the planning system and tax policies would reduce transactional friction, making it easier to execute property deals. Investors would benefit from a streamlined process that encourages activity rather than discouraging it through high taxes. This could lead to increased opportunities in the bridging finance sector, where quick access to funds is essential for taking advantage of market conditions. For more information on bridging finance options, check out our bridging finance guide.
Frequently asked questions
What are the proposed changes to the planning system?
The proposed changes include introducing statutory deadlines for planning applications, increasing resources for local authorities, and facilitating the conversion of vacant commercial properties into mixed-use schemes.
How will these reforms affect landlords?
These reforms aim to provide landlords with greater support by reinstating tax reliefs and reducing burdensome regulations, thus encouraging investment in the private rented sector.