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Boris Johnson's planning reforms promise to unleash unprecedented opportunities



The Covid-19 induced change in the way we work and shop, as well as prime minister Boris Johnson’s planning reforms aimed at kick-starting a construction industry will unleash a world of opportunities for SME property developers and construction companies.

<
p>Even with the gradual re-opening of shops and the hospitality sector, it is increasingly clear that many retailers won’t re-open, leading to a long-term change in the use of commercial property. The threat of future pandemic waves and the potential of new technologies may lead to a sharp shift in how commercial buildings are used. The rise of e-commerce, the increasing appeal of remote working, and the success of virtual events has sped up the decline of brick-and-mortar shops, offices and leisure venues. Having realised remote working does not lead to loss of productivity, companies may decide to shrink their office space. Event organisers who have found virtual networking acceptable, not to mention cheaper, may decide to stick to online. Video calls instead of business trips may reduce the need for hotel stay. Fewer office workers and business travelers may lead to the demise of bars and restaurants where they would have eaten at and entertained. 

Furthermore, Johnson has pledged to overhaul the planning system in order to kick-start the construction industry. The proposed reforms will enable property owners to convert commercial buildings, including newly-vacant shops, into homes more easily. Developers will no longer have to go through the usual planning application process to demolish and rebuild empty residential and commercial buildings, as long as they are being used for new homes. 

What does that mean for SME property developers, small construction companies, and the future of commercial-to-residential conversions? And what does it mean for lenders like us at Blend Network which finance many of these?

For SME property developers and small construction companies, the planning reforms and greater availability of deals will unleash a world of opportunities. Some of the proposed reforms are particularly targeted at supporting those groups as more small companies will be given flexibility to change the use of their premises without a planning application or local council approval. Yet more opportunities will lead to increased competition in accessing deals, which is why having established, solid relationships with lenders backing up projects may make or break a deal. Those looking to take advantage of these opportunities will need to up their game by having lenders who are able to speak their language and understand the property development game. 

In summary, we see great opportunities and encourage all players in this market to stay alert to be able to spot them, and to build strong relationships with lenders who are able and willing to back them up. We at Blend Network are able to work with our borrowers as partners coming from the mindset that we are all in this together.


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