The commercial mortgage and bridging finance sector is calling for urgent planning reforms and enhanced support for landlords from the next Prime Minister. TAB, a notable player in the specialist finance market, has highlighted that current planning delays and tax policies are hindering investment in commercial and mixed-use properties, which is important for addressing the housing supply crisis.
TL;DR: TAB advocates for planning reforms, including statutory deadlines and support for landlords; these changes could stimulate investment and increase housing supply.
What Planning Reforms Are Needed?
Karen Rodrigues, sales director at TAB, has emphasized the need for a modernized planning system that includes statutory deadlines and better resourcing for local authorities. This reform aims to expedite the approval process for change-of-use applications, particularly for converting vacant retail and office spaces into mixed-use developments. Rodrigues noted that while TAB is capable of delivering commercial mortgages quickly, the sluggish planning system is a significant barrier for investors and businesses.
How Will This Impact Landlords and Property Investors?
Rodrigues argues that the private rented sector (PRS) plays a vital role in meeting housing demand, especially in light of the ongoing social housing shortfall. She has called on the next government to support landlords, who have often been viewed merely as a tax revenue source. Key proposals include reinstating mortgage interest tax relief for individual landlords, abolishing the stamp duty surcharge, and bringing back the Wear and Tear Allowance. These changes could significantly alleviate the financial burden on landlords and encourage more investment in rental properties.
What Changes Are Suggested for Business Rates?
Another area of concern highlighted by TAB is the need for reforming business rates. Rodrigues believes that reducing costs for independent retailers and hospitality businesses would benefit high streets and the tenants of semi-commercial properties. Lower business rates could rejuvenate local economies and support the viability of mixed-use developments, which are essential for community regeneration.
What This Means for Bridging Finance
For borrowers and investors in the bridging finance sector, the proposed reforms could lead to a more dynamic property market. By reducing transactional friction, such as high stamp duty rates, the government could enable more deals to go through, benefiting both lenders and borrowers. As TAB focuses on increasing lending momentum, these reforms are essential for creating a conducive environment for property investment and development.
Frequently asked questions
What is bridging finance?
Bridging finance is a short-term loan designed to bridge the gap between immediate funding needs and long-term financing solutions. It’s often used in property transactions to secure quick funding for purchases or renovations.
How can landlords benefit from proposed tax reforms?
Proposed tax reforms, such as reinstating mortgage interest tax relief and abolishing the stamp duty surcharge, could reduce financial pressures on landlords, making it easier for them to maintain and expand their rental portfolios.