Goodbye Rayner, goodbye planning reform – Druce

It was a significant loss for Keir Starmer, removing his Housing Secretary, on whose shoulders Labour’s pledge to build 1.5 million new homes was firmly sitting.

Rayner was highly effective. She understood the issues curtailing the development of housing. Planning reform was at the top of her to-do list. Rayner’s reform was first announced in July last year, promising to streamline the planning system and reduce the number of times a council could overturn an appeal.

More recently, in May, she promised to tackle regulatory burdens and streamline planning decisions for developments of up to nine homes. These pledges, and many more, were funnelled into the Planning and Infrastructure Bill, which is currently sitting in the committee stage at the House of Lords.

Diminishing the need for bridging loans

While this sounds like great news for the property sector and, by extension, for brokers doing bridging deals, these reforms could disrupt an entire income stream.

Sponsored

How brokers can shape the future of shared ownership

Sponsored by Halifax Intermediaries

As a bridging lender that doesn’t shy away from telling it how it is, I want to make it plain that faster, easier planning would cut the number of developers needing bridging loans.

If planning and build times reduce, those who do still require a bridging loan will require one for a shorter term, leading to lower accrued interest. Plus, with planning more predictable, mainstream lenders would be more willing to compete for pre-planning or land loans, and by extension, borrowers won’t need the same level of advice on specialist bridging deals.

There will be far less need for high-margin, problem-solving loans.

An interrupted vision?

Having said that, Rayner’s resignation could undermine the momentum of planning reform. Steve Reed may have some experience in housing (a seven-month stint as Shadow Housing Secretary), but he’s not the deputy Prime Minister. He doesn’t have Keir Starmer’s ear in the same way Rayner did.

Plus, fears have been raised that this legislation would allow developers to disregard issues relating to the environment when putting forward planning proposals. These concerns should be familiar to Reed, given his most recent position as minister for environment, food and rural affairs, and are far more likely to weaken his resolve than Rayner’s.

Housing was clearly a hot topic at the recent Labour Party Conference, with Reed announcing plans for 12 new towns, including one in the constituency where I reside, whose MP was not consulted.

The party’s pledge to deliver 1.5 million homes was also reaffirmed. However, the announcement lacked direction on how this would be achieved, leading to questions not only relating to planning reform but also land release and funding for these new towns.

Housing might still be on the agenda, but progress is clearly stalling.

Angela Rayner was driving the narrative on planning reform. She was the deputy Prime Minister, and that lent her political muscle and gravitas.

A ‘change in tone’ has already been noted since Reed’s takeover.

Only time will tell whether he’ll be able to prevent the bill from being watered down, but it’s unlikely to be as revolutionary as Rayner had hoped.

Bad news for the wider property market. But for brokers doing bridging deals, this isn’t insignificant. Without reform, planning approvals will remain slow, uncertain and complex. There will continue to be demand for specialist bridging lenders who understand risk and planning nuances, and likewise expert brokers who can provide advice on the best deals available.

Thanks to Rayner and her tax avoidance, there will continue to be a call for bridging products for some time to come.