The commercial mortgage and bridging finance sector is calling for significant planning reforms and support for landlords from the next Prime Minister. TAB, a commercial mortgage and bridging lender, argues that current planning delays and tax policies are hindering investment in the property market, particularly in commercial and mixed-use developments.
TL;DR: TAB emphasizes the need for planning reform to accelerate project approvals; landlords are urged to receive more support to meet housing demand.
What Planning Reforms Are Needed?
Karen Rodrigues, sales director at TAB, highlights the urgent need for a refreshed planning system. She advocates for the introduction of statutory deadlines for planning applications, increased resources for local authorities, and a presumption in favour of converting unused commercial spaces. These reforms aim to expedite the approval process for change-of-use applications, making it easier to repurpose vacant retail and office units into mixed-use developments.
How Will This Impact Landlords and Investors?
Rodrigues stresses that the private rented sector (PRS) plays a vital role in addressing housing shortages. She argues that the next government must support landlords, as they are essential in meeting housing demand until more social housing is constructed. TAB 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 measures are intended to alleviate the financial burden on landlords and encourage investment in rental properties.
What Changes Are Suggested for Business Rates?
In addition to planning reforms, TAB suggests revising business rates to support independent retailers and hospitality businesses. Rodrigues points out that high business rates are a significant obstacle for high streets and mixed-use investments. By implementing policies that lower rates for independent businesses, the government could stimulate local economies and support tenants in semi-commercial properties.
What This Means for Bridging Finance
For those involved in bridging finance, these proposed reforms could lead to a more dynamic property market. By reducing transactional friction, such as high stamp duty costs, investors and landlords may find it easier to engage in property transactions. This could result in increased demand for bridging loans, which are often used to finance quick acquisitions or renovations. The emphasis on faster planning approvals aligns with the needs of bridging finance providers who aim to facilitate rapid funding for property projects.
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 to facilitate quick funding for acquisitions or renovations.
How can landlords benefit from the proposed reforms?
Landlords could benefit from proposed reforms by receiving financial support through reinstated tax reliefs and reduced business rates, allowing for greater investment in rental properties and improved cash flow.