The commercial mortgage and bridging finance sector is urging the next Prime Minister to implement significant planning reforms and support for landlords. TAB, a specialist finance provider, believes that these changes are essential to enhance the housing supply and stimulate investment in commercial and mixed-use properties.
TL;DR: TAB calls for urgent planning reforms to expedite housing projects; landlords are urged to receive more support to meet housing demand.
What Planning Reforms Are Needed?
Karen Rodrigues, sales director at TAB, emphasises the pressing need for a revamped 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 would facilitate quicker approvals for change-of-use applications, allowing vacant retail and office units to be transformed into mixed-use developments.
Currently, the slow pace of the planning system is hindering the potential of the commercial mortgage market, which is keen to support regeneration projects. By streamlining processes, the government could unlock significant investment opportunities, ultimately benefiting communities and the economy.
How Will Landlords Benefit?
According to TAB, the private rented sector (PRS) plays an important role in addressing the UK’s housing shortage. Rodrigues argues that the government must support landlords, as they are vital in meeting housing demands, especially in the absence of sufficient social housing. She highlights that previous administrations have often viewed landlords merely as a source of tax revenue, which has led to burdensome regulations.
To reverse this trend, Rodrigues suggests reinstating mortgage interest tax relief for individual landlords, abolishing the stamp duty surcharge, and reintroducing the Wear and Tear Allowance. These measures would alleviate financial pressures on landlords and encourage investment in rental properties, ultimately benefiting tenants.
What Changes Are Needed for Business Rates?
Rodrigues also calls for a review of business rates, which she identifies as a significant obstacle for independent retailers and hospitality businesses. Lowering costs for these sectors could rejuvenate high streets and support tenants in semi-commercial properties. By creating a more favourable business environment, the government could stimulate local economies and enhance the appeal of mixed-use investments.
Bridging Finance and Its Impact on Investors
For investors and borrowers in the bridging finance market, these proposed reforms could lead to a more dynamic property market. With reduced transactional friction from taxes like stamp duty, property deals could become more viable and attractive. Furthermore, a more efficient planning system would enable quicker project completions, improving cash flow for investors and providing more housing options for borrowers.
As the government prepares for a leadership change, stakeholders in the property market should closely monitor these discussions. The outcome could significantly impact investment strategies and the overall health of the UK property market. For more information on financing options, consider checking 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 immediate funding needs and longer-term financing solutions. It is often used in property transactions to secure quick funding for purchases or renovations.
How can I benefit from bridging loans?
Bridging loans can provide fast access to capital, which is particularly beneficial for property investors looking to seize opportunities quickly. They can be used for various purposes, including purchasing properties at auction or financing renovations before securing a traditional mortgage.