Key measures at glance:
• £3bn had been set aside to prepare for Brexit
• Stamp duty is to be abolished immediately for first-time buyers purchasing properties worth up to £300,000
• £44bn in loans and guarantees would be provided to deliver 300,000 new homes a year by the mid-2020s
• Review into delays in developments given planning permission being taken forward
• £1.7bn city region transport fund, to be shared between six regions with elected mayors and other areas
• Rises in business rates to be pegged to CPI measure of inflation, not higher RPI, a cut of £2.3bn
• A freeze on duty for wines, spirits and beer
• The National Living Wage to rise to £7.83 an hour
• Capital gains tax exemption scrapped for some overseas investors on commercial property
Dr Walter Boettcher
, in-house Chief Economist and Forecaster said:
The budget was delivered to great expectations with the Chancellor tipping his hat to both political and economic necessities.
Stamp duty reductions may create a movement in the housing market, so will provide some economic stimulus to balance the economic downgrades. This should be good news for retail too.
A few substantial sums have been committed to housing and infrastructure as well as further devolution - all positives for commercial property and posing new opportunities for the likes of Andy Burnham and Andy Street.
Will this be enough to tempt occupiers out of London and into the regions? I think labour availability may be a more pressing issue in the short term.
It looks as though foreign investors did not go unscathed if you read the fine print. From 2020 capital gains on UK property for non-residents may well now be in the tax net. This seems likely to have significant implications for the investment market, particularly London where foreign investors currently account for around 75 per cent of central London investment. There is talk of exemptions for pension funds, but we await clarity and indications on how the market might react. In the meantime, this is yet another layer of uncertainty.
Given the lack of transparency, it’s hard to know if the £3 billion commitment to prepare for every Brexit outcome proves to be adequate, or just a drop in the ocean.
Overall, a competent budget that may fall short on stimulus, but addresses some political concerns and lays the long-term ground work for further substantial development.
, Head of Rating, said:
After years of campaigning, we have finally been successful in our plight for more frequent revaluations and the pattern to follow will be every three years.
In addition to this, we were pleased to hear that the Chancellor has agreed to calculate the rate poundage using CPI indexation rather than RPI, which has been brought forward from its proposed date of April 2020 to April 2018.
Pubs with an assessment of under £100,000 will continue to receive £1,000 per annum of rates relief until March 2019.
There was no detailed announcement in relation to self- assessment, despite Colliers having been advised directly from Government that it would be impossible to implement more frequent revaluations without at least some element of this being incorporated.
Business rates are now at an eye watering tax rate of 50% for every £1 of rental value bringing in £25 bn per annum and rising. So, whilst we are pleased the Chancellor has listened to our longstanding campaigns, it’s a shame the Government has taken so long to do this. While a 3.9% rise would have resulted in a £1bn extra tax take next April, a 3.0% rise is hardly a tax holiday. It will still mean a £0.75bn rise for hard-pressed businesses in their business rates bill.
You will be aware of the outcome of the Mazars case at Supreme Court which ruled that buildings with multiple occupiers should be assessed on a floor-by-floor basis, removing any allowances for multiple floor occupation. It was announced today that this so-called “Staircase Tax” is to be taken back to Supreme Court for reversal and valuations which have been split will now be re-merged. This is interesting as in our opinion it should never happened in the first place and it will doubtless be difficult and expensive to reverse.
All these measures are only just scratching the surface. We have a retail sector that has been heavily impacted by the rate rises following the seven-year revaluation receiving little relief and an appeal system, commonly acknowledged by rate payers as not being fit for purpose. Many businesses find the new CCA appeal system unworkable and impossible to negotiate. However, we are hopeful that we can make some further progress with the Programme Owner coming in to meet with us next week to discuss the system and take feedback.
Director of Planning, Jonathan Manns
Familiar suspects at any housing-related line-up, are measures to get more people buying, building and occupying homes. The real challenge, however, is to secure cross-party support for market interventions which ensure these make a meaningful contribution. Until then Government targets will be tombstones to our failures, rather than foundations of success.
A week after Theresa May promised to take “personal charge” of the housing crisis, the Budget has cemented the Government’s commitment to delivering 300,000 new homes per year. In doing so, The Chancellor has commuted amongst other measures, £44 billion of funding and loans to support the delivery of new homes. Such promises make great sound bites but realising them is undoubtedly a challenge.
The recent history of housing in England is ‘writ large’ in the back-catalogue of ministerial statement. It’s important not to forget that the Chancellor’s promise comes little more than two years after David Cameron pledged a ‘national crusade’ to get homes built, promising delivery of 20,000 starter-homes per year.
The fact of the matter is that house-building has been declining since the 1970’s and, at the same time, homes have become decreasingly affordable. This, quite logically, has an impact upon who can afford to buy them and where. The result is a spatial problem of affordability, the symptoms of which are those of inequality and which are particularly acute in London and the South East of England; therefore, putting the spotlight on permissions granted versus houses actually built with this promised review should make everything more transparent.
, Head of Alternative Markets said:
The Chancellor’s decision to freeze duty on cider, wine, beer and spirits will mean a pint of beer will be 12p less and a bottle of whisky £1.15 less than in 2018; which is good for the consumer and bound to be well received by the Food & Beverage sector.
The business rates relief for local pubs will make the biggest difference, however. Business rates have been a burden on the sector for some time as they represent one of the biggest costs to landlords; so a £1,000 extension of the rate relief will be widely welcomed.
, Head of UK Regions, said:
The Chancellor’s Budget reaffirmed his Government’s commitment to regional devolution with the creation of a £1.7bn transport fund for city regions, a second devolution deal for the West Midlands and further investment into HS2, amongst other initiatives.
His announcement of further investment in to rail infrastructure, in particular, funding for mobile and digital connectivity on Trans-Pennine routes, will be music to many Northern commuters’ ears. However, despite the Chancellor’s claims that productivity is key to the health of our overall economy; HS3 was left out. Investment in infrastructure to shorten journey times from Sheffield to Manchester and Manchester to Leeds is vital if we are to tackle the productivity gap and realise the economic growth potential of the North.