It was Philip Hammond’s first Autumn Statement as Chancellor of the Exchequer, but did it deliver for business and the property industry? As always, the answer is yes and no.
Here’s our round-up of the announcements relating to the property sector.
This was Hammond’s chance to really show his support for business by implementing real reform to the business rates system, but instead the measures announced in the Autumn Statement will have little or no impact.
While the £6.7bn business rates package may sound impressive, it is in fact just a repeat of previous proposals put forward by the Chancellor’s predecessors.
While the Government’s continued commitment to supporting small firms by making them exempt from paying business rates is welcomed, the decision to lower the transitional business rates relief cap from 45 per cent to 42 per cent will be viewed by larger businesses as a slap in the face.
There was some good news with the announcement that there will be a new
100 per cent business rates relief for new full-fibre infrastructure for five years from 1 April 2017 to support the roll-out of high speed telecommunications to more homes and businesses, but overall this was a missed opportunity for the Chancellor to prove that the Government really is pro-business by overhauling the current business rates system.
It would appear that the industry’s pleas for a fairer system for all have fallen on deaf ears yet again.
Housing was at the heart of the Chancellor’s Autumn Statement. The Government has set itself a target of building one million homes by 2020 and the measures announced by Philip Hammond are intended to help achieve this aim.
Among the £3.7bn that has been set aside for new housing projects in England, £2.3bn will be spent on infrastructure, such as roads, related to housing development.
The remaining £1.4bn will be used to build more affordable housing, adding to the existing £4.7bn already being spent on grants for affordable housing over the next five years.
Further details on the Government’s plans to provide further stimulus for the housing sector will be unveiled in a forthcoming Housing White Paper.
This is a clear signal that the government is committed to tackling the housing crisis, and as important as providing homes for everyone is, we should also remember that house building is central to stimulating inward investment. For every affordable home built in the UK, an additional £106,000 is generated for the economy and 2.2 FTE (full time equivalent) jobs created.
Having said all that, one obvious omission from the Autumn Statement was stamp duty land tax. There were hopes that the Chancellor would announce some changes to those made by George Osborne, but sadly it wasn’t to be.
In its current form, stamp duty is not only impacting those looking to buy second homes, it is hitting the “just about managing” or “JAMs”, as well as first-time buyers. It could also have disastrous implications for the delivery of new housing, particularly affordable homes, and stymie future major-scale investment.