The commercial mortgage and bridging finance sector is urging the next Prime Minister to implement significant planning reforms and provide greater support for landlords. This call comes as the sector highlights the pressing need for practical changes to stimulate housing supply and facilitate regeneration projects across the UK.
TL;DR: The specialist finance sector seeks urgent planning reforms and support for landlords; delays in planning and tax policies are hindering investment in commercial properties.
What Planning Reforms Are Needed?
According to industry experts, the current planning system is a major obstacle to development. Karen Rodrigues, sales director at TAB, emphasises the need for a refreshed planning framework that includes statutory deadlines and better resourcing for local authorities. This would help accelerate the approval process for change-of-use applications, particularly for converting vacant retail and office spaces into mixed-use developments.
Rodrigues points out that while the sector is capable of delivering commercial mortgages swiftly, the planning process is slow, which frustrates businesses and investors. By reforming planning regulations, the government could unlock vital projects, rejuvenate communities, and stimulate economic growth.
Why Is Support for Landlords Important?
Landlords play an important role in addressing housing demand, especially in the private rented sector (PRS). The call for landlord support is rooted in the belief that until more social housing is constructed, the PRS is essential for meeting housing needs. Rodrigues argues that successive governments have treated landlords primarily as a source of tax revenue, leading to a restrictive environment for property investment.
To enhance the viability of the PRS, Rodrigues suggests reinstating mortgage interest tax relief for individual landlords, eliminating the stamp duty surcharge, and reintroducing the Wear and Tear Allowance. These measures would alleviate financial pressures on landlords and encourage more investment in rental properties.
What Changes to Business Rates Are Proposed?
Another area of concern is the burden of business rates on high streets and mixed-use properties. Rodrigues advocates for reforming business rates to lower costs for independent retailers and hospitality businesses. By doing so, the government could create a more supportive environment for local businesses, which in turn would benefit tenants in semi-commercial properties.
Reducing business rates could help invigorate high streets, making them more attractive to consumers and encouraging foot traffic. This change is seen as essential for the revitalisation of local economies and the overall health of the commercial property market.
What This Means for Bridging Finance
The proposed reforms have significant implications for landlords, borrowers, and investors. A streamlined planning process would facilitate quicker project approvals, making it easier for investors to enter the market and for landlords to adapt properties to meet changing demands. Additionally, reinstating tax reliefs could improve the financial viability of rental properties, encouraging more investment in the sector.
For bridging finance providers, these reforms could lead to increased demand for financing solutions as property owners seek to capitalise on new opportunities. The overall aim is to create a more dynamic property market that encourages investment and supports economic recovery.
Frequently Asked Questions
What are the main proposals for planning reform?
The proposals include introducing statutory deadlines for planning decisions, increasing local authority resources, and facilitating the conversion of redundant commercial spaces into mixed-use developments.
How would changes to tax policies affect landlords?
Changes such as reinstating mortgage interest tax relief and scrapping the stamp duty surcharge would alleviate financial burdens on landlords, making it more viable to invest in rental properties.