Budget 2015: Property sector unimpressed

THE policy chief of national surveyors’ organisation the RICS has taken a swipe at George Osborne’s Budget for being “more of a party political broadcast with insufficient focus on land and construction as drivers of growth”.

Head of policy of the Royal Institute of Chartered Surveyors Jeremy Blackburn also said the review of inheritance tax deeds of variation was a lacklustre measure and, combined with annuity cash releases, were likely to encourage baby boomers to downsize and bring new supply to the market.

“Rebalancing the economy across the regions is vital and we welcome the focus on 20 housing zones outside the capital and eight proposed housing zones across the rest of the UK to create the much needed 45,000 new homes,” he said.

“We welcome the city deals, enterprise zones and business rate retention (in Greater Manchester) which will create opportunities for greater property investment across the regions.”

Meanwhile, Karen Campbell, North West head of tax at business advisors Grant Thornton, warned there could be further house price rises as a result of the Chancellor’s efforts to help first time buyers.

She explained: “Initially there seemed to be little for the real estate industry although a welcome review of business rates was announced.

“Then there was the interesting announcement of boosting the savings culture in the UK, comprising the fully flexible ISA, the Help-2-Buy ISA and the changes to annuities.

“The Help-2-Buy ISA effectively provides a 25% top-up for first time buyers, and is undoubtedly welcome news to aspiring homeowners.

“The top-up is capped at £3,000 (for those saving £12,000) but the measure does not deal with the current housing shortage or the lack of supply of suitable housing.

“Our concern is therefore that the boost provided though the tax system could result in higher demand and ultimately lead to higher house prices.”

However, more positive noises have come from  the national organisation for property owners and investors the British Property Group which says the devolution heralded in the Chancellor’s Budget may have “profound and far-reaching consequences”.

Chief executive Melanie Leech said the challenge for the next Parliament would be to continue the (devolution) journey and make good the promises of reforms.

And she welcomed the fact that George Osborne and the Government had headed calls from the property industry and others to further increase the power of local authorities to shape development and growth in their areas through a new raft of initiatives, including new city deals, enterprise zones and power over skills, business and support for transport.

“We applaud the Government’s focus on bringing forward brownfield land and unused public sector sites for development,” she said.

“However, we would urge all parties to redcongise that housing is more than just a numbers game. Thriving, sustainable communities need places to work, relax and a host of other infrastructure that  we need in our day to day lives.”

She also hailed the ground-breaking announcement which will allow Greater Manchester to keep 100% of its local business rates growth.

Leech added: “The infrastructure funding challenge is one of the greatest obstacles to growth, but the package of business rates announcements this week – greater retention by local authorities and a fundamental review of the business rates system – may provide part of the solution by allowing cities to finance new projects against a secure stream of rates income.”

The British Property Federation is a not-for-profit membership organisation representing companies involved in property ownership and investment.