Richard Bourne shares his thoughts on the impact the Spring Budget will have on the Property Industry.

 

Chancellor’s Spring Budget

Following yesterday’s spring budget announcement from the Chancellor, Jeremy Hunt, Martin’s Properties CEO, Richard Bourne, shares his thoughts on the impact this will have on the property industry.

Cautiously optimistic.

Projected growth in GDP and falling inflation from 11% to 4% (with a further fall to 2% projected over the next few months) is positive and should lead to a reduction in the base rate from its current high of 5.25%. However, the geopolitical landscape remains uncertain with continuing conflict and major global events still of concern, which could lead to further spikes in inflation. We are witnessing increased business confidence from both the market and our own portfolio, so we anticipate further activity throughout the course of this year.

Further support for our Retailers needed.

The extension to 75% business rate relief and the government’s support for small businesses with an increase in VAT registration threshold from £85k to £90k is welcome. However, it will only benefit a small minority of our customers who qualify for this support and we would have liked to see the government go further in their support for retailers and in turn the nation’s high streets.

 

Bring Back Tax Free Shopping for International Shoppers.

The United Kingdom remains the only European country not to offer tax free shopping to tourists. Reintroducing tax-free shopping in the UK would stimulate tourism, overseas spending, and footfall to our high streets and in turn deliver increased tax revenues. There are over 500 million EU shoppers who continue to shop in Paris, Milan and other tax free destinations rather than the UK which are automatically 20% cheaper. As a business with a large customer base of retailers and a prime tourist shopping destination on the Kings Road, it is a disappointing oversight which will only harm the tax revenues for the government and UK Plc going forward.

Generation Rent.

The government has in recent years reduced support for private residential landlords, resulting in a large number of landlords leaving the market. Combined with continued demand from “generation rent”, this has put upward pressure on demand and rents. With no support to address this in this budget, we predict that residential rents will continue to rise.

Unlocking nutrient land.

We welcome the launch of round 2 of the Local Nutrient Mitigation Fund. Our strategic land business, Obsidian Strategic, will be able to assist landowners, local councils and developers in delivering more homes in these key locations by taking land through the local plan process and release key strategic sites for much needed housing.

 

Setting the stage.

The 40-45% tax relief for the UK’s cultural sector poses an interesting potential for alternative use in our new developments and larger premises. We would welcome further cultural institutions, which add to the culture and amenity offering as well as deliver positive benefit to the nighttime economy and neighbouring retail, leisure and restaurants across Britain’s high streets.

 

Life science leading the way.

The government’s £520m further investment into life sciences, manufacturing and R&D is a positive boost for this sector. Over the last 5 years we have amassed over 12 acres of assets in strategic locations around Oxford, which has become a world class centre for life sciences, alongside Cambridge.