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Colliers International reacts to the Chancellor’s Economic Update

08 07 20 Colliers International reacts to the Chancellors Economic Update hero

Global commercial real estate company Colliers International, has responded to today’s Summer Economic Update from the Chancellor of the Exchequer, Rishi Sunak.

Experts from across the business have given their opinions on the temporary stamp duty changes, VAT cut, the Coronavirus Job Retention Scheme and the new Eat Out to Help Out scheme.

Dr Walter Boettcher, Head of Research and Economics, said: “Today’s announcements had a few novelties, but employed conventional tools from the Treasury’s toolbox, such as using the UK housing market to stimulate economic activity. Nevertheless, there were several new interventions, designed to get us through the economic downturn.”

Coronavirus Job Retention scheme

Considering the update on the Coronavirus Job Retention scheme, Dr Boettcher said: “The Chancellor has confirmed that the furlough scheme will be wound down in October as already scheduled. But the new payments, the Kick Starter scheme, as well as training programmes, offer some transitory arrangements for certain segments of the workforce, but will not prop up the workforce as the furlough scheme has done so far. The real question remains as to whether the timing of existing furloughing scheme will align with the incipient economic recovery. Given that a vaccine, according to press reports, may become available in October, that could be a definitive month in shaping the UK’s recovery.”

Stamp duty

Speaking about the temporary stamp duty changes Andrew White, Head of Residential at Colliers added: “Stamp duty has long been a blocker to the UK’s housing market, as it’s a huge fee buyers have to find, on top of a significant 5-10 per cent deposit. Any reduction in stamp duty right now would be a welcome reprieve for the housing industry, which naturally all but stagnated during the COVID-19 lockdown. While pent up demand has been released now that buyers can carry out viewings, reducing the amount of funds they have to raise in advance would bring even more buyers to the market quicker.

“However, we would welcome further thought on the higher rates of stamp duty which is slowing the sale of properties over £925,000, which is significant part of the market in London and the South East.

“Likewise, the previous 3 per cent surcharge for second properties and the tightening of tax allowance for the private buy-to-let market means that the transmission mechanism may not deliver the intended results at a scale similar to what might have been achieved in the past.”

VAT reduction and Eat Out to Help Out

James Shorthouse, Head of Alternative Markets, which includes hospitality and leisure, shared his thoughts on the measures targeted at these sectors. He said: “The cut in VAT to 5 per cent until January is very welcome news for the leisure and hospitality sector and will be a clear boost for consumers, if the cut is passed on, increasing their spending power and encouraging them back into pubs, restaurants, hotels and tourist attractions. This, alongside the new Kick Start Scheme will provide much needed support and security for the millions of young people working in the hospitality sector.

“The introduction of the ‘Eat Out to Help Out’ scheme is a surprise development, and should certainly encourage people back into our restaurants and re-establish eating out as a normal part of daily life.”

Related Experts

Walter Boettcher

Head of Research and Economics

Research and Forecasting

London - West End

I am the the Chief Economist at global property advisors Colliers International based in London.  I am a research economist identifying timely research topics and directing research and forecasting outputs.

I have over 20 years UK and European property industry experience and extensive expertise across a wide range of property sectors and related industries.

I participate regularly in industry panel discussions, but am focused more on direct client engagement with institutions, property companies, banks, and private investors. A regular media commentator, I have a wide range of national and broadcast experience.

I joined Colliers International in August 2007 after several years at a private property company where he was responsible for managing a mixed portfolio of London residential, retail and office assets.

Previously, I worked in a few London property advisory firms, a geodemographic company as well as a few youthful sojourns in the US offshore oil industry, local government and entertainment business.

I am an economics graduate of the University of Texas at Austin and received his PhD from the Faculty of Science at University College London.  I am a member of Lambda Alpha International and the Society of Property Researchers.

Perhaps best known for my alternative take on property economics and investment, I am a keen proponent of UK regional development and infrastructure investment.

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Andrew White

Head of UK Residential & International Properties Asia

Residential - Development

London - West End

Andrew heads up the UK Residential & International Properties (Asia) Department at Colliers and is a specialist advisor in residential and mixed use developments.  He has been involved in some of the largest and most complex sites within the U.K.

The Residential Department at Colliers comprises a market leading  team of  surveyors and advisers who focus on London, The South East and the Regions, advising  clients on their options for maximising value for their assets, including planning, development consultancy, Build To Rent, investment and disposal strategy and New Homes & Project marketing, both in the UK and Internationally.

Andrew has worked in the sector since 1994  having started his career with a large multinational real estate agency, then running his own land agency for 8 years before joining Colliers in 2013. He has advised government bodies such as the NHS, as well as family businesses, funds, charities, developers and companies on their strategy for disposal of their land holdings and property assets.

Clients include, Legal & General, the NHS, Royal London Asset Management, The Diocese of London, London Square, Telereal Trilium, Threadneedle, Aberdeen Standard, Greggs, Rexel and PSA Group as well as other large corporate landowners.

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James Shorthouse

Head of Alternative Markets

Licensed and Leisure

London - West End

James is one of the UK's leading advisers in Pub, Bar, Restaurant and Leisure sectors. He has worked in the sector for over 30 years, a period during which the sector has undergone enormous changes in its operational, ownership and regulatory structures.

Acting on behalf of major operators, investors and banks on portfolios and high value single assets, James' operator clients include Greene King, Ei group, Casual Dining Group, and Novus. On the investor side, for many years he advised Nomura and Terra Firma, worked closely with Cerberus on all of its leisure sector investments and has recently advised Patron Capital, Stellex and NewRiver.

Within Colliers International, James heads up the UK Licensed & Leisure team and also runs the businesses Alternative Markets Division which encompasses Hotels, Automotive, Healthcare, and other specialist Leisure teams.

Throughout his career James has advised major UK and International lenders, both on new lending and on developing and executing exit strategies for distressed lending positions. His team have worked with a number of F&B operators to rationalise their portfolios and have advised landlords on how to preserve value and retain tenants in difficult times.

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Kim Inam

PR Manager

Marketing & Communications

London - West End

I'm a communications professional who has previously worked as a journalist for eight years covering a broad range of topics including politics, crime, health and housing in north London. In recent years I have worked in corporate communications for local authorities across London  and joined Colliers in October 2019, initially providing maternity leave cover.

I provide strategic public relations advice to various business lines within the UK organisation to secure recognition for their work in the property press as well as key target media, and work with our experts to produce thought leadership pieces which are of interest to our clients and colleagues within the commercial real estate sector. In addition, alongside colleagues in the PR and wider communications team, I provide media and social media training for our in-house experts to prepare them for media opportunities and raise their personal brand within the sector.

As well as supporting various teams within the UK business, I also I curate and edit regular content for the blog, which drives credible business leads to our experts.


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