The commercial mortgage and bridging finance sectors are calling for urgent planning reforms and enhanced support for landlords from the next Prime Minister. Industry leaders argue that these changes are essential for revitalising the housing supply and addressing the challenges faced by property investors.
TL;DR: The next Prime Minister is urged to implement planning reforms and support for landlords; these changes could unlock investment in regeneration projects and improve housing supply.
What Planning Reforms Are Being Proposed?
Industry experts, particularly from the commercial mortgage sector, are advocating for a comprehensive overhaul of the UK planning system. Key proposals include introducing statutory deadlines for planning applications, increasing resources for local authorities, and establishing a presumption in favour of converting unused commercial spaces. This approach aims to expedite the approval process for change-of-use applications, making it easier to transform vacant retail and office units into mixed-use developments.
Why Are These Reforms Important for Bridging Finance?
The current slow pace of the planning system is seen as a significant barrier to investment in the property market. While bridging finance can facilitate quick funding for projects, the lengthy planning delays hinder the ability of investors and developers to move forward. By reforming the planning process, the government could unlock potential projects, stimulate economic growth, and rejuvenate communities, all of which are important for the bridging finance sector.
How Will Landlords Be Affected?
Landlords are encouraged to voice their needs as the next government is expected to focus on the private rented sector (PRS). Current policies have often placed a heavy tax burden on landlords, which has led to calls for the reinstatement of mortgage interest tax relief and the removal of the stamp duty surcharge. These changes could alleviate financial pressures on landlords, enabling them to better meet housing demand amid a shortage of social housing.
What This Means for Property Investors
For property investors, the proposed reforms could provide a more conducive environment for investment. By reducing transactional friction through tax reforms and easing the regulatory burden, investors may find it easier to engage in property transactions. This could lead to increased activity in the market, particularly in mixed-use and commercial properties, where bridging finance can play a pivotal role in facilitating quick acquisitions and renovations. For more information on this financing option, check out our bridging finance guide.
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’s often used in property transactions to provide quick access to funds.
How can planning reforms impact the property market?
Planning reforms can streamline the approval process for property developments, making it easier for investors to initiate projects. This can lead to increased housing supply and economic growth, benefiting the overall property market.