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Colliers experts react to the Budget

27 10 21 Colliers Reaction to Budget hero

The Chancellor's budget was centred on creating a new economy post-COVID as the OBR expects recovery to happen at a quicker pace than in previous predictions.


Much of Rishi Sunak’s announcements were focussed on increased spending on public services and individual taxation, however there were still some important announcements for the commercial property industry. The levelling up agenda continued to be front and centre, including infrastructure investment, while the issues surrounding business rates were kicked further down the road. 

The sector with the biggest takeaways was the leisure industry, with tax rate reliefs for museums, theatres and galleries, as well as a draught relief to be bought in by 2023 alongside a reform of alcohol duty, bringing pubs onto more competitive level with retailers. 

You can read the reaction of our experts from across our business below:

Economic overview

Walter Boettcher, Head of Research & Economics:

“Confirmation of the Government focus on ‘levelling up’ is welcome. Local settlements were announced which will create local physical visibility of central government commitment. 

“The real transformation, though, will be linked to larger scale infrastructure projects. Commitments of up to £130 billion were mentioned and assurances that the integrated rail plan would soon be released, alongside road maintenance funds were real headline grabbers. The initiatives were described as being part of an ‘Infrastructure Revolution’. Nevertheless, a true revolution of scale requires private sector funds.

"The Chancellor mentioned the unlocking of institutional investment in connection to innovation investment, and by implication, physical infrastructure. For commercial property, this has the potential to be revolutionary, although hurdles remain related to de-risking what is often perceived by institutional funds as long term illiquid investment. Navigating these hurdles effectively is the key challenge in realising much of the development associated with the levelling up agenda.”

“There wasn’t anything completely unexpected in the OBR’s high-level economic forecasts, with the size of the UK economy predicted to return to pre-pandemic levels by the turn of the year. 2021 growth was revised up from 4 per cent in the March forecast to 6.5 per cent, while 2022 growth was revised down slightly.

"Tax cuts for those on the lowest incomes and an increase in the National Minimum Wage are welcome and will hopefully help alleviate some of the pressure from higher inflation, which is now expected to average 4 per cent next year. However, it is disappointing that the Government did not address energy prices directly, especially as the Chancellor acknowledged that wholesale energy prices have soared in the past few months.”

Business Rates

John Webber, Head of Business Rates:

“After delaying his response four times in the last year, the Chancellor has yet again missed a golden opportunity to reassure businesses and to instigate the fundamental reforms campaigned for and needed - particularly for the beleaguered retail sector.

“There were some positive announcements today but overall, the Chancellor’s measures were “underwhelming” said Webber. “The Chancellor has made it clear he is determined to continue to raise “£25 billion from this tax and as a result his proposals only tinker with the system. The measures suggested will not have a major impact on saving the high street in the longer term.

“The Government published its interim report of the fundamental review of the business rates system last March, when it listed the responses of the industry to the consultation from across all sectors- both private and public. The industry was unanimous about what needed to be done – but disappointingly only two of the points suggested have been addressed today.

“To not tackle the business rates burden, the multiplier, the relief system, overhaul the CCA appeals system or even to consider other taxes such as an on-line sales tax or delivery tax to help reduce the burden of business rates- feels like a kick in the teeth. There were some positive announcements, but overall everything that I and my fellow professionals, businesses and trade groups have been saying for years seem to have been ignored. We have seen no overall properly  concluded reform and no apology for the lack of action.” 

“I wonder why the Government went through the process of consultation in the first place if it is to ignore all advice yet again.

“The Chancellor does seem hostage to the Treasury. The problem with his response however is that by failing to properly reform business rates, he’ll have cooked the goose that lays the golden eggs, and more business will struggle or go under. Local finances will be even more impacted particularly in the poorest parts of the country.” 

“It’s disappointing, missed opportunity.”

View our full Business Rates reaction

Leisure Sector

James Shorthouse, Head of Alternative Markets: 

“There were some surprise positives in today’s budget announcements with the simplification of the alcohol duty rates, and the double tax relief for theatres, museums, and galleries. The Chancellor’s recognition of the scale and importance of the English and Welsh wine makers is a well-deserved acknowledgment of the growth of this sector, and of the quality of their wines. 

“However, increases in minimum wages will impact the hospitality sector and no doubt lead to further price inflation for the consumer, as will the ongoing problems in the supply chain which are starting to create shortages in the availability of certain menu items in pubs and restaurants, as well as lack of stock on supermarket shelves. 

“There were a number of positive points made on business rates but the fact that the Government is still committed to receiving £25 billion per annum does nothing to deal with the elephant in the room which is the size of the tax and the multiplier which will continue to rise over the coming years. In the long term, the level is unsustainable.”


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

Oliver Kolodseike

Director of Economic and Research

Research and Forecasting

London - West End

Oliver is Head of Economic Research and leads the quarterly UK forecasting process including the publication of Colliers' Real Estate Investment Forecasts (REIF) report. He also  authors the monthly Property Snapshot and, quarterly Scotland Snapshot. Prior to joining Colliers, he worked for the Centre for Economics and Business Research and IHS Markit. Oliver holds a BA in Economics from  Georg-August University Göttingen (Germany) and an MSc in Economics from Exeter University.

View expert

John Webber

Head of Rating

Rating

Birmingham

I have over 30 years’ experience in the rating industry and lead a 90 plus rating team at Colliers International.  When I took over responsibility for the team in 2005, it consisted of only a dozen people and has now grown into one of the leading rating advisory teams in the country.  I am a member of Colliers International Management Executive as well as sitting on the company’s promotion panel. 

I am regularly called upon by the national media to give my views on a range of business rates issues and I am vocal commentator on the 2017 Revaluation.

I started my career in the Valuation Office Agency in Kidderminster.  I joined Gerald Eve in 2000 where I spent 10 years before moving to Gooch Webster (now Colliers International). I sit on the National Retail Panel of Rating Surveyors Association which provides guidance on how the RSA town committees work with the VOA and valuation matters.  John sits on the RICS Rating Diploma Committee having passed the prestigious qualification in 2014.

Philip Harrison and I founded 'Accurates' in 2007, the Collier's Compliance and Audit team, which although forms an integral part of the Rating Team is now a leading brand in its own right.

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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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Rebecca Allen

PR Manager

Marketing & Communications

London - West End

I have been working in commercial property communications for over seven years having previously worked at CBRE and most recently Savills.

In my role at Colliers I am responsible for the PR of national capital markets, London agency and capital markets teams and investment property management.

My role includes:

  • Creating and exectuing PR plans for business lines that span press, marketing and digital channels
  • Media monitoring and reporting
  • Journalist relationship building through face to face meetings, phone calls day to day assistance with stories
  • Reputation management of the Colliers brand

 

 

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