General Election and unfavourable tax system ‘top concerns’ for property and construction industry

The General Election and an unfavourable tax system have been cited as the top concerns facing the property industry.

Crowe’s 2019 Property and Construction Outlook report gathered the opinions of the property and construction industry, identifying the key challenges and opportunities the sector faces over the next 12 months.

Rob Gunn, partner in Crowe’s Midlands office, said: “It is clear from the results of this year’s survey that the sector is calling for stability in this current political and economic environment.

“With the impending General Election topping the concerns of our respondents (27%), up from 13% in 2018, interestingly Brexit, although still a concern at 20%, has seen a 10% drop from 2018.

“It is interesting that despite these overall concerns, 53% of respondents remain confident and believe that their business will grow in the next 12 months.”

For the third consecutive year, the vast majority of respondents feel that the tax system is unfavourable to property developers and investors (65%), with only 13% believing that it is favourable. 48% of respondents identified stamp duty land tax (SDLT) as the biggest barrier to business growth and 36% stated tax complexity.

This is underpinned by the longstanding calls from the property and construction sector for SDLT to be cut in an attempt to boost activity in the housing market. In addition, 63% stated greenbelt protections are not conducive to the housing market.

A variety of technological factors are affecting the sector, with 52% believing that retail property will be most impacted, up from 32% in 2018.

Forty-two per cent believe that modern methods of construction (MMC) will be the next big thing to set a future trend.

Stacy Eden, partner and head of property and construction at Crowe, said: “There have been some interesting results from this year’s survey, notably the increased concern around the political environment.

“The continued concern around SDLT was largely expected, but we welcome the recent noise from political parties, indicating that they may be in favour of reducing levels. The hope now is that they listen to the opinions of the sector and take action, including reducing the level of tax complexity and streamlining the UK’s planning regulations.

“While the UK remains an attractive location for investment, the industry is changing. Businesses face new challenges, with an uncertain political and economic environment, high taxation levels and a restrictive planning system.

“It is strongly recommended that those navigating the industry’s changing landscape seek specialist advice to identify opportunities and challenges, mitigate risks and secure last value for their businesses.”