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Budget 2020: Colliers International reacts to Chancellor Rishi Sunak’s 2020 Budget

11 03 20 budget meeting

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” 


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.

View expert

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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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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John Roberts

Head of Automotive and Roadside

Automotive and Roadside

Birmingham

John has worked within this niche sector for many years and has been a member of the Colliers International Automotive and Roadside Team for over 15 years. His specialist areas of expertise include motor dealerships, car supermarkets, after sales retail networks including motorist centres, trade counter, drive thru' and roadside retail properties.

He acts on behalf of some of the lead investors, developers and occupiers within these sectors dealing with professional, agency, development and investment matters. His clients include, Arnold Clark, Volkswagen Group, Johnsons Cars, AEW, EG Group, CBRE Investors, Formula One Autocentres and Listers Group.

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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 Colliers.com blog, which drives credible business leads to our experts.

 

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