Cushman & Wakefield experts from across the UK react to this year's budget and what it means for property.
Business Rates
Mike Flecknoe, Partner, Business Rates at Cushman & Wakefield comments:
“The temporary 2020/21 rates reliefs announced for the retail, hospitality and leisure sectors, together with the additional support for pubs valued below £100,000 and additional funding for those small businesses in receipt of small business relief are to be welcomed given the likely short-term economic impact of the Coronavirus (COVID-19) .
“However, it is disappointing there was no business rates support in this budget for large business, even those occupying multiple lower value properties given the impact of State Aid Rules, nor other sectors outside retail, leisure or hospitality.
“The Chancellor announced that the promised fundamental review on business rates will take place reporting in the Autumn. The terms of reference, which were also released, are encouragingly wide, but to enable fundamental change other forms of taxation will also likely need to be considered too."
Regional Reaction
Birmingham
Infrastructure - Simon Lloyd, Partner and Head of Logistics & Industrial at Cushman & Wakefield in Birmingham comments:
“The announcement of further investment into alternative power sources for cars, such as EVs is welcome news for the Midlands manufacturing sector and therefore the region should be a beneficiary of this policy.
Expenditure on roads is also positive and it will help to speed up journey times as well as keeping vehicles moving, reducing pollution and reducing cost.
Whilst short term Coronavirus (COVID-19) measures will help smaller businesses it is unlikely to cover the full cost.”
Life Sciences - Scott Rutherford, Partner, Office Agency at Cushman & Wakefield in Birmingham comments:
“The significant resources and focus provided in the Budget to enable and support additional Research and Development and investment in scientific research and life sciences outside of the established core South East and Cambridge Triangle has to be hugely positive for the Midlands as a Region and will capitalise and build on existing investments and commitments already made. This is great news and will give increased confidence to the new Science Parks and schemes coming through to the market to provide the best space for their success.”
Electric Vehicles - Tom Rigg, Head of Automotive & Roadside at Cushman & Wakefield comments:
“The £500m announced in today’s Budget to support the rollout of a fast-charging network for electric vehicles is welcome support to overcome one of the largest barriers to widespread EV adoption. The Office for Low Emission Vehicles will complete a comprehensive electric vehicle charging infrastructure review to target the funds effectively, but no details have been provided when this review will be completed.
“This should aim to give consumers, suppliers and property owners the facts about electric vehicle charging in the UK and how practical it is to own and provide for electric cars in the low emission economy. Until then, drivers will have to work out for themselves how feasible it is to buy, service, locally charge and travel long distances.”
Residential - Joe Williams, Associate in Cushman & Wakefield’s Residential team in Birmingham comments:
“The 2% additional surcharge on stamp duty for non-UK residents may dampen interest from the overseas buyer market. Whilst this may provide local buyers with an advantage when competing for newly built housing, it should be acknowledged that a number of residential properties within Birmingham wouldn’t have been delivered without the support from overseas purchasers. There is a risk that some future developments may not be delivered if the overseas market decides to pursue opportunities elsewhere as a result.
“Further support for the Affordable Housing programme is welcomed. The only way we are going to get close to building the targeted 300,000 homes a year is through public investment in social housing.
“It is a positive sign that this government has recognised the growing population of homeless people. It is hoped that this budget announcement will go some way to helping to address this problem which is prevalent throughout the country.”
Manchester
John Keyes, Chair of Public Sector at Cushman & Wakefield based in Manchester comments:
“A Budget that supports public services, invests at historic levels in capital projects and infrastructure, supports research and development and moves civil servants out of London should be very good news for Manchester and the North West.
We need to look out for how the money is actually allocated but North West public bodies and businesses need to be gearing up to exploit the new opportunities.
There was specific reference to investment in the Manchester-Leeds rail link, the project that the whole region has been championing.
Manchester is particularly well placed to attract government jobs, exploiting the pools of graduates and other skilled people within easy access of the city. The wider region will need to ensure it benefits from investment in town and city growth including places like Preston. It will need to deliver on new hospital programmes with North Manchester, Lancashire Teaching Hospital (in Preston) and Morecambe Bay on the priority list.
The region needs to exploit the £1.5 billion capital pot for further education, following the ambitions of projects such a Manchester College’s new £100 million city centre campus.
The Chancellor seemed to endorse some benefits of the Manchester and North West way of doing things. He demonstrated a commitment to devolution with the West Yorkshire city deal and elected mayor. Greater Manchester will hope that this is a sign of a continued commitment to devolve powers.
There was also funding announced to help rough sleepers, an acknowledgement perhaps to initiatives driven in the City by Mayor Andy Burnham. The North West needs to grab the opportunity. The government will be focused on those who can “get things done”!”
Bristol
Tim Davis, Head of Cushman & Wakefield’s Bristol office comments:
“With election promises and the Coronavirus (COVID-19) dominating the agenda, the Budget promised a huge fiscal stimulus for the next five years. The highlights from an infrastructure perspective include a focus on roads, rail, affordable housing, digital connectivity and research and development. However from a regional perspective the priorities are still focused very much on Wales, Scotland, Northern Ireland and the Northern Powerhouse, giving the impression that the South West is doing OK so does not need special attention.”
Cardiff
Richard Murphy , Head of Cushman & Wakefield’s Cardiff office comments:
“It is hard at this time to look beyond the short-term Coronavirus (COVID-19) issues. In that regard, the Chancellor’s “budget within a budget”, contained some positive reassurance to many of our clients running small businesses in Wales, which form the life blood of our economy. This. coupled with some clarity on sick pay measures is helpful, coming off the back of the recent Bank of England announcements, will provide some immediate reassurance. However, the unknown remains in relation to the severity of the impact and just how short is “short-term”. Turning to the core budget, the devil will be in the detail in terms of the true benefit to Wales but the mood music is positive:
- £360 million additional funding to the Welsh Government
- £27 billion for UK Roads and Motorways (including the pothole fund which will be welcomed in Wales)
- £5 billion pledged to enhance broadband coverage across the UK
For the property sector in Wales:
- 100% rates relief for qualifying small businesses, should help the private operator retail and leisure sector and goes beyond that currently proposed by Welsh Government. However, the fundamental review and reform promised in the Autumn is now desperately needed
- £12 billion of funding to deliver affordable homes – will be welcomed by both Local Authorities and the Housing Association sector
- £1 billion Building Safety Fund to help unlock the current ‘who pays’ paralysis in dealing with unsafe cladding
- £5.2 billion in Flood Defence funding will be welcomed if it flows through to the badly hit areas of Wales
- The 2% Stamp Duty Surcharge for non-UK residents will not impact Wales
In summary, a Conservative Budget that proposes to increase borrowing, provided it delivers medium-term structural benefits in the public realm, is likely to prove positive for the property sector in Wales. Welsh Government’s response will be of interest, particularly in relation to Roads and Motorways, given last years’ abandonment of the M4 relief road announcement and in any clarification provided on its own stance in regard to Business Rates Reform.”
Leeds
Stephen Miles, Partner in Cushman & Wakefield’s Development & Planning based in Leeds comments:
“The 2020 Budget is hugely positive for the North and Yorkshire and Humber in particular with the emphasis on ‘levelling up’ the country through substantial investment in infrastructure, growth, R&D and housing. The long awaited devolution deal for West Yorkshire is the highlight which will not only unlock substantial new Government Funding over the next five years, but will also position the region to negotiate for future flexibilities in Governance and investment including business rate retention – the progress being made in those other city regions that have already had such deals shows what an important driver of growth it will be.
“Proposals to relocate 700 Treasury jobs focused on economic decision making to the north as a precursor to a larger scale relocation of 22,000 civil service jobs is a positive which will not only support new office floor space across northern cities but also underlines the Government’s desire to regionalise decision making on economic matters. The proposal for investment in R&D across universities across the country, and two new Carbon Capture Storage clusters, with Humberside cited as one potential location, are also positives for the region, as is a new £400million brownfield land programme and £1.5bn over 5 years for FE capital investment.
“These proposals, in addition to the Government’s reconfirmed commitment to Phase 2b of HS2 from Birmingham to Leeds and Manchester as well as Northern Powerhouse Rail from Manchester to Leeds, provide a very positive outlook for the region’s growth prospects. Housing was less ‘front page’ with York Central appearing to have been the only scheme awarded Housing Infrastructure Fund money at a regional level. In relation to the proposal for a temporary abolition of business rates on retail property, this will doubtlessly be welcomed by retailers but may only provide a short-term impact on town centres and will do little to address the causes of the decline of the high street. Some reviews were also proposed which provide some uncertainty including Public Works Loan Board, another (!) Planning White Paper and Treasury Greenbook – all of which could carry implications for which it is a case of ‘watch this space’ with a further Government Comprehensive Spending Review expected shortly.”
Newcastle
Richard Turner, Partner and Head of Capital Markets at Cushman & Wakefield in Newcastle Upon Tyne, comments:
“Faced with manifesto commitments for levelling up and a certain short-term shock to the economy the Chancellor has abandoned his party’s decade long austerity message in favour of a quasi-Keynesian expansion of public spending, particularly in investment.
“Infrastructure spending will create widespread opportunities for the property sector with transport, green agenda and affordable housing commitments particularly pertinent.
“The fact that the Chancellor keeps applying sticking plasters to the business rates system, this time in widespread reliefs to smaller businesses in the retail and leisure sectors, only serves to highlight the need for fundamental reform to reflect the rate of change in the market, which will only be the hastened by the public’s behaviour in response to the Coronavirus (COVID-19).”
