The British Property Federation (BPF) comments on the the detail of the Autumn Statement 2016 announcements:
Infrastructure and housing
The Budget’s hidden gem is the spending on infrastructure to help bring forward housing sites. Infrastructure spending is housing delivery’s silver bullet and the considerable commitment to invest about £2bn a year is therefore very welcome. The £1.7bn for accelerated construction on public land will boost the faster delivery of homes.
Infrastructure investment is a good thing in itself, but it also attracts investment from developers who are more likely to build new houses in places where there are sound transport links, digital networks and industrial hubs to supply residents and businesses.
We are pleased to see that the business rate rises that businesses will face because of the recent revaluation are being phased in at a slightly slower pace. Taxes should not be the ruination of businesses and this will help.
Stamp Duty Land Tax
One big disappointment is the lack of movement on stamp duty reform, hampering transactions across the entire housing market, making the labour force less mobile and putting a break on the economy. The stamp duty surcharge on institutional Build-to-Rent housing, sends out completely the wrong signals to pension funds and others who are willing to invest £billions on the new homes that we need. The recent increase in commercial stamp duty rates has been equally damaging, inhibiting the regeneration and development of our towns and cities and ultimately impacting on people’s pensions and savings.
Local Enterprise Partnerships (LEPs)
It is good to see a further £1.8bn will be allocated to Local Enterprise Partnerships across the country; many are working hard to deliver growth and employment in their areas and this will help unlock land for housing, boost skills and improve transport connections. While we would like to see greater consistency in LEPs’ approach and transparency, this funding coupled with the promise of further devolution deals shows a real commitment from Government to inclusive regional growth.
Base Erosion and Profit Shifting (BEPS) Reform
We remain concerned that the proposals to restrict tax relief on interest costs and reform the loss relief rules will inadvertently hinder investment in real estate and infrastructure. We are disappointed that the government is going ahead with implementation in April 2017.
Most large-scale Build-to-Rent landlords do not charge tenants’ fees and therefore they will not be particularly perturbed by the Chancellor’s announcement, but what is banned and how it works in practice will need careful consideration.
Rumours that the Chancellor would announce the start of a discussion on a new industrial strategy did not materialise. An industrial strategy will be a key element in tackling a number of the structural challenges and barriers to productivity the Chancellor identified. As a sector contributing almost £100bn to the economy each year, we hope the government will bring forward its proposals soon and look forward to contributing to the debate.
Energy and Environment
The recommitment to the Business Tax Roadmap - which may hint that we can expect the enabling clauses for the Business Energy Tax Reform in the forthcoming Finance Bill – was welcome. It will instil some much needed coherence and clarity in the business energy efficiency tax landscape.