The commercial mortgage and bridging finance sector is calling for urgent planning reforms and enhanced support for landlords from the next Prime Minister. The TAB has highlighted that current planning delays and tax policies are hindering investment in commercial and mixed-use properties, which are essential for addressing the housing supply crisis.
TL;DR: TAB advocates for planning reforms and landlord support to stimulate investment; current policies are limiting growth in the commercial property sector.
What Planning Reforms are Needed?
Karen Rodrigues, sales director at TAB, emphasizes the necessity for a revamped planning system that includes statutory deadlines and improved local authority resources. She argues that a presumption in favour of converting unused commercial spaces into residential units is vital. This would expedite change-of-use applications and facilitate the transformation of vacant retail and office spaces into mixed-use developments. Rodrigues points out that while TAB is capable of providing commercial mortgages quickly, the planning process is sluggish, which delays essential projects aimed at community regeneration and economic growth.
How Will This Impact Landlords?
According to TAB, the private rented sector (PRS) plays a important role in meeting housing demand, especially as the country grapples with a shortage of social housing. Rodrigues asserts that the next government must support landlords, who have been treated primarily as sources of tax revenue. She advocates for the reinstatement of mortgage interest tax relief for individual landlords, the removal of the stamp duty surcharge, and the reintroduction of the Wear and Tear Allowance. These changes would alleviate some financial burdens on landlords and encourage further investment in the rental market.
What Changes Are Suggested for Business Rates?
Rodrigues also calls for a reform of business rates, arguing that reducing costs for independent retailers and hospitality businesses would benefit high streets and the tenants of semi-commercial properties. She believes that policies aimed at lowering rates for local service providers would support the revitalization of high streets, which are currently struggling. By creating a more conducive environment for local businesses, the next Prime Minister can help stimulate economic activity and enhance the attractiveness of mixed-use investments.
What This Means for Bridging Finance
The proposed planning reforms and tax adjustments are particularly significant for the bridging finance sector. By streamlining the planning process and reducing tax burdens, the government could unlock a wave of new projects that require quick financing solutions. Bridging finance is often used to secure funding for properties that need rapid turnaround, making these reforms critical for investors and developers looking to capitalize on opportunities in the commercial and residential markets.
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, or to fund property renovations quickly.
How can I benefit from bridging finance?
Investors can use bridging finance to access quick funding for property purchases or renovations, allowing them to take advantage of time-sensitive opportunities in the market.
