British Property Federation responds to the Spring Budget

8 Mar 2017

Policy area: Tax & Finance

Commenting on the Spring Budget 2017, Melanie Leech, Chief Executive of the British Property Federation, said:

“This was possibly one of the least eventful Budgets in recent memory, and we are thankful for that. The government had nothing to prove after two months of White Papers and Strategies, and the real estate industry will welcome the stability the Budget signals. We anticipated the government’s short-term relief for businesses hardest hit by the increases in business rates, but we urge the Chancellor to understand the unfairness prevailing in the appeals system. The Chancellor has two Budgets this year and he should use his second in the Autumn to also have a stock-take of some of the recent SDLT measures and whether they are having unintended consequences or inhibiting investment.”​

  • Business rates

“We welcome the Chancellor's announcement to cap business rate increases to £50 a month for any business coming out of the small business relief bracket, as well as the £300 million fund for local authorities to give further relief to local businesses, and look forward to hearing from the government on their preferred approach for more regular valuations. However, while the government has moderated its contentious proposals on business rates appeals and the powers of the Valuation Tribunal, we continue to challenge whether they are needed at all.”

  • Tax

“Real estate taxes in the UK are amongst the highest in the OECD and we will continue to press the Chancellor to ensure a fair, stable and predictable tax system which will maintain investor confidence and stimulate real estate activity.” 

  • Infrastructure​

“The Chancellor’s focus on increasing infrastructure spend will act as the backbone to regeneration up and down the country, opening sites for new housing and employment. This provides a huge vote of confidence for our industry which supports most, if not all, UK economic activity, encompassing a vast range of essential economic and social infrastructure. We provide the professionally-managed rented homes in which many people live, the commercial space in which virtually all types of businesses operate and the shopping centres, restaurants, cinemas and more in which people spend leisure time.”

  • Devolution to London

“It is hugely positive to see the government agree to establish a joint taskforce bringing together the GLA, TfL, London Councils, HM Treasury, Department for Transport and Department for Communities and Local Government to explore the options for piloting a Development Rights Auction Model (DRAM) on a major infrastructure project in London. However, the creation of new infrastructure funding models must be done as part of the root and branch review of CIL, and should be tested with the wider developer community to ensure that efforts to bring about more infrastructure do not become barriers to the very development they are seeking to underpin.”

  • Residential SDLT

“We welcome the Chancellor’s decision to defer the introduction of a payment and filing system of two weeks for SDLT. However, it is two years since the major reform of SDLT bands and the system is ripe for review, to ensure it is not leading to unintended consequences, or preventing investment. The government should use the Autumn Budget to review whether the new bands and three per cent surcharge on investments by institutions are not barriers to a housing market firing on all cylinders.”  

  • Social care

“After failing to mention healthcare professionals in his Autumn Statement, they will be relieved they weren’t forgotten in the Budget. The promise of an additional £2bn for the adult social care system over the next three years, with £1bn of that available in the next year, will come as some relief to local authorities struggling to cope with increased levels of demand on services. It seems likely that this funding will be focused on areas facing the highest levels of delayed discharge – but with the number of spaces in care homes falling across the country as existing premises fall into obsolescence, and a lack of local authority funding meaning new developments struggle to stack up, any improvements will rely on an increase in care home development. A Green Paper on the long-term security and sustainability of the adult social care system is a sensible option, but many will no doubt be concerned this will delay providing solutions to what is a system in dire need of immediate support.

“The Budget promises to increase capital investment in A&E departments and provide more on-site GP facilities – but people visit A&E with non-urgent issues when they are unable to visit their local GP, so committing instead to increase funding for primary care would allow for cheaper, more efficient treatment of these ailments and ease the pressure on A&E.”