Today, the Chancellor of the Exchequer Rishi Sunak delivered his Budget for 2020, setting in stone the Government’s plans for spending and revenue-raising for the year ahead.
It was a confidence building Budget, which covered a wide range of themes, including several property related topics, many of which have been the focus of ongoing debate over recent months.
It was a speech light in detail, so as we study the fine print of the ‘Red Book’, we present to you our initial views from a cross-section of business lines at Colliers International giving reactions to the announcements made.
Macro-Economic
Walter Boettcher, Head of Research & Forecasting at Colliers International, said: “The impressive set of investment announcements, digging in as it does into government coffers, needs to be coupled with engagement with the commercial property sector so as to tap into the even deeper coffers of domestic and international investment funds.
“The UK Budget’s commitments to regional rebalancing and infrastructure investment should allay fears that stimulus might have been delayed and that Government momentum might have been lost. Regional stakeholders should take comfort in affirmation of the Government’s investment intentions and find renewed confidence in formulating their own development plans and initiatives to tap into the wealth of domestic and international capital available to do the heavy lifting across all regional markets. Hopefully, the regional development agenda will find renewed momentum.
“UK regional rebalancing does not need to come at the expense of London’s investment needs. UK investment is not a zero-sum game, there is sufficient capital to float all the boats. The real step that needs to be taken is to encourage cooperation between regional stakeholders to create investment opportunities of scale to attract this capital.”
Leisure
James Shorthouse, Head of Alternative Markets at Colliers International: “We whole heartedly welcome the announcements in today’s Budget that alcohol duty rises have been frozen, particularly in light of the arrival of coronavirus and the potential impact on footfall. This Budget has also taken significant steps in the right direction to alleviate this pressure through the one-year business rates holiday for most businesses within the leisure sector, reducing costs and increasing business resilience. ”
Residential
Andrew White, Head of Residential at Colliers International, said: “The new Stamp Duty Land Tax on overseas purchasers is only going to further subdue international buyers from investing in the UK. The Government is trying to stop overseas investors from creating too much demand for residential property, whilst perhaps not understanding the importance of early capital in development programmes. SDLT in the UK is now far too complicated and causing issues across the residential sector and should have been addressed comprehensively.
“Although any social housing funding measures are welcomed and helpful, many registered providers lack the ability to purchase land in a competitive environment. Streamlining planning policy would be much more beneficial to stimulate the housing market.”
Green agenda
Andres Guzman, Head of Sustainability at Colliers International said: “In the year that Britain is going to host COP26 we would expect that the budget would more closely reflect our Government’s ambitions to achieve net-zero carbon emissions by 2050.
“While we welcome the investment in research and development and carbon capture it takes a long time to bear fruit, and we need to be acting sooner rather than later to start making an impact on the environment and improving air quality now.
“While investment in green mobility and improving the natural environment is a start, what has failed to be addressed is the opportunity to reduce carbon emissions now, by tackling energy inefficiency in the built environment.”
Devolution
The Budget included the announcement of a £2bn devolution deal with a directly elected mayor for West Yorkshire, which was welcomed by Ben Hall, Head of the Leeds office at Colliers International. “This devolution deal for West Yorkshire is long overdue, and recognises the significance of Leeds and also the city’s potential,” he said. “Leeds provides the biggest contribution to the Northern Powerhouse, as well as being the UK’s largest regional finance centre with a total workforce of over 1.4 million. Devolution will mean decisions for Yorkshire can be made in Yorkshire, instead of in Westminster. It will also boost the regional economy by making it possible to realise transport schemes that will improve connectivity.”
Automotive and Roadside
John Roberts, Head of Automotive and Roadside at Colliers International:
“This announcement of £500 million towards car charging hubs is a step in the right direction for the both the automotive industry and the property sector. The Chancellor’s plans are clearly welcomed and are extremely important for the environment, however the Government needs to ensure that there is a clear and cohesive plan and strategy for nationwide electric vehicle charging infrastructure rollout to cater for the future of the sector.
“Meanwhile, concerns over the ability of the current UK energy supply to meet future demand and the lack of guidance for landlords and developers, for integrating charging points in to commercial premises and developments, is causing misperceptions.
“Charging at home is fine if you have off-street parking. Of course, many of us don’t. Some local authorities and London Boroughs are selectively placing charging points in lamp posts. This is a great initiative, but what happens when every vehicle is electric?”
“Furthermore, there needs to be more consistency in terms of the approach to the infrastructure – at the moment it seems a ‘free for all’ approach has been adopted, so anyone with an electrical vehicle who arrives at a charging point does not even know what type of charge they are going to receive, and whether it will even work.
“As charging times are improving, the need for higher levels of electricity is also required, however some locations and properties are not able to provide the required capacities.
“Further infrastructure will need to be built and created, particularly at existing petrol filling stations and arterial route locations to serve any EV user travelling longer distances.
“The addition of charging points at filling stations in town and city car parks, shopping centres, retail parks, supermarkets and new public ‘charging parks’ has potential implications for landlords and developers in terms of potential space required. Vehicles filling with petrol or diesel take a matter of minutes. Currently, EV charging, even with superchargers, can take significantly longer.
“The UK Government needs to fully support both the property and petrol retailing sectors to make the conversion to EVs a realistic and achievable goal.
“In terms of Rishi’s comments on tax reforms to make it cheaper to buy zero or low emission cars, vans, motorbikes and taxis, this needs to make the cars on a par, if not cheaper, with their petrol and diesel equivalent, to make this a viable and practical option for all rather than a fashion or lifestyle choice as it now”
