Budget 2013: Mixed reaction from property sector

THE West Midlands property sector has welcomed some aspects of George Osborne’s Budget but criticised him for what it didn’t include.

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Jan Thompson, Jones Lang LaSalle’s Birmingham-based Midland chairman welcomed the £3bn spending on infrastructure and acceptance of a single pot for local enterprise but he said the key question on everyone’s lips is how much will Whitehall release to allow the LEP’s to proceed and when?

“I think we are all disappointed that the budget contained no news on how the government would allocate resources to regional LEPs, through the Heseltine Review,” he said. 

“Until this is decided, the LEPs for Greater Birmingham & Solihull, and for the Black Country remain uncertain about when they can begin to implement their ideas for growth and make them a reality.” 

Ashley Hudson, head of Knight Frank’s Birmingham office, said: “As predicted, the Government will be putting more resources into the New Buy Scheme to stimulate house building, as well as a 20% equity loan for anyone buying a new home.

“Osborne has also committed to boost infrastructure spending by £3bn by 2015/16 and is also actively considering with the Bank of England potential extensions to the successful Future for Lending scheme which should boost lending further.

Stephen Hemming, director, planning and development consultancy at Lambert Smith Hampton in Birmingham, also welcomed the Chancellor’s announcement of £3.5bn support for infrastructure projects.

He said: “You have to welcome the announcement, particularly as it is a recurring spend over five years rather than being a one-off.  It is unfortunate that the spending won’t come in until 2015/16, although it is appreciated that the money comes as a result of savings elsewhere.

“It has to be hoped that delivery of these projects will help to energise the construction and development sectors and have knock on effects of opening up further development opportunities.”

He added: “The Chancellor’s assistance for shared equity housing and lending to banks for new mortgages has to be good news if the money filters through and results in increased demand for housing and hence increased activity in the residential development sector.”

However, Hemming argues George Osborne missed the opportunity to further kick-start development across the UK by not cementing the proposed change that will allow the conversion of offices into residential space.

“While we welcome the Government’s decision to allow greater flexibility for the re-use of commercial property, which is often restricted by planning policy, leading to significant periods of vacancy, they have not gone far enough in actually implementing the legislation,” he said.

Peter Taylor, national head of planning at law firm DLA Piper, said: “The announcement by the Chancellor in relation to what is termed the ‘Help to Buy Homes’ initiative will be welcomed enormously by the house building industry.

“The proposal comprises two components, namely a £3.5bn capital spend over three years towards shared equity loans and a loan of up to 20% of a new build homes’ value to be offered to people to cover the deposit for anyone buying a new house.” 

But Tom Dennes, head of residential agency at CPBigwood, said: “We welcome further investment in house building, but it begs the question ‘where are the houses going to be built?’

“Are we to eat into the green belt further to achieve this and we know how unpopular that is going to be across the country.

“In Stratford-upon-Avon, the Shottery scheme was passed for 800 houses but is being challenged this summer and for there to be any meaningful impact on the economy, dormant schemes need to be re-financed with work commencing straight away, so integral to the initiative must be the instruction to local authorities to fast track planning applications.

Adrian Willet, a director in the development team at CBRE in Birmingham, said: “The West Midlands is facing a significant shortfall of new homes and with home sales in the region some 45% below their peak, according to a recent CBRE report, the initiatives announced by Mr Osborne to get the market moving again will be welcomed by the housing sector.

“Government-backed lending initiatives, such as FirstBuy and NewBuy, have already helped restore confidence with house builders and the introduction of Help to Buy to provide support for those who want to get onto the housing ladder should give further confidence to the market.

“These new initiatives, coupled with reforms to the planning system, will hopefully provide the catalyst for developers to unlock sites and start building again.”