Specialist lender TAB has urged the next Prime Minister to introduce planning reform, support landlords and overhaul property taxation in a bid to stimulate investment and accelerate regeneration projects.
The commercial mortgage and bridging lender says outdated planning processes, high transaction costs and successive tax changes have reduced investment across the commercial and mixed-use property sectors.
TAB argues that specialist lenders are well positioned to support housing delivery, commercial-to-residential conversions and high street regeneration, but says policy reform is needed to unlock further activity.
Among its recommendations are statutory planning deadlines, increased local authority resources and a stronger presumption in favour of converting vacant commercial buildings into alternative uses.
PRS SUPPORT
The lender also called for measures to support the private rented sector, including the reinstatement of mortgage interest tax relief for individual landlords, the removal of the additional stamp duty surcharge and the return of the Wear and Tear Allowance.
Karen Rodrigues (main picture, inset), Sales Director at TAB, says: “The biggest issue is planning reform. The next PM needs to introduce a refreshed planning system, with statutory deadlines, greater local authority resourcing and a presumption in favour of converting redundant commercial space.
“That would facilitate faster approval of change-of-use applications and make it easier to convert vacant retail and office units into mixed-use schemes.”
PLANING DELAYS
Rodrigues says planning delays were preventing projects from progressing despite greater speed and flexibility being available from specialist lenders.
She adds: “While we are delivering commercial mortgages at bridging speed, the planning system is moving at a snail’s pace – and far too slowly for the businesses and investors it is supposed to be serving.
“Planning reform would help unlock projects, regenerate communities and support economic growth.”
“The private rented sector remains critical to meeting housing demand.”
TAB also argues that the private rented sector remains critical to meeting housing demand and warned against further measures that discourage investment.
Rodrigues says: “Until we start delivering more social housing, the country needs the PRS. Despite this, successive governments have treated private landlords as nothing more than a source of tax revenue.
“We need to strip out decades of red tape and housing policy intervention and reverse damaging fiscal attacks on landlords.”
BARRIERS TO INVESTMENT
The lender also highlighted business rates and stamp duty as barriers to investment, particularly for mixed-use and commercial property transactions.
Rodrigues says: “The property market suffers from too much transactional friction. Too often, otherwise sensible deals fail because taxes make them uneconomic.
“Property investors, landlords and business owners need a system that encourages activity rather than discourages it.”
TAB believes increased housing delivery would create wider opportunities across the specialist finance market, generating demand for development finance, refurbishment funding, land acquisition lending and commercial-to-residential conversion projects.
Rodrigues adds: “A sustained programme of housebuilding creates demand for land acquisition finance, refurbishment finance, commercial-to-residential conversions and mixed-use redevelopment. The entire specialist lending ecosystem tends to benefit when housing output rises.”
