Dr. Walter Boettcher, Director of Research & Forecasting, Colliers International commented:

“Despite poor economic data and projections as well as pressure from the IMF, Mr. Osborne remains committed to Plan A. Given the high level of economic policy uncertainty which has been inhibiting business investment and expansion, the continuity of policy will at least provide welcome stability. International capital markets and investors can remove one less worry from their list, after the Eurozone policy and the US fiscal cliff.

“From a property perspective, few measures were aimed specifically at commercial real estate. Rate relief for newly completed buildings and an announcement of capital investment in infrastructure, will have a marginal impact compared to policies that might have stimulated economic growth and business investment on a wider scale. These were also few. The property industry will be left feeling decidedly underwhelmed, despite measures aimed to assist the struggling SME sector and measures that may act to support household spending such as local authority caps, petrol tax cancellation and rail fare restrictions. 

“On the Corporate side some might be worried about the aggressive tax avoidance initiatives, but Osborne appears to have ‘internationalised’ the plan by asserting that the UK would use its G8 leadership next year, to ensure that UK business competitiveness is not compromised.

“In many ways some of the key issues impacting property may lay outside Osborne’s remit. Responsibility for the implementation timetable of new financial regulation and its impact on commercial bank lending seems to fall elsewhere and the Funding for Lending Scheme’s impact is not yet definitive.

“In summary while the property sector may not have been specifically targeted for new policies, the sector will no doubt benefit by improved corporate confidence that comes from a continuity of existing plans, as well as by continued support from international investors. The real focus of confidence has now shifted to the Eurozone and the US. Unfortunately resolution of these concerns is unlikely until mid 2013. In the meantime, the UK remains open for business – just!”