RICS calls on Chancellor to ring-fence infrastructure investment

PROPERTY industry body RICS is urging Chancellor George Osborne to ring-fence investment in infrastructure during his Budget speech next Wednesday.

It says such a move would ensure stability and growth in the property sector.

RICS says that the Chancellor has trailed this as an ‘emergency budget’, and with housebuilding at barely half the level needed to keep pace with demand, an infrastructure investment deficit of £60bn, and a generational divide opening in the housing market, he is right to call it an emergency.

“The new government has emphasised the importance of fiscal rules, from freezing income tax, National Insurance and VAT, but will the Chancellor get the focus right? Property can be a soft option for taxation, but the sector must not be viewed as a deficit-reduction cash-cow to compensate for tax freezes elsewhere,” it said.

“The danger is that local authority planning departments are seen as an easy target for spending cuts, but this is a false economy. Put bluntly, we will only deliver the homes and infrastructure we need if we have a properly resourced planning system. Cut the planners and we have even more unused land queuing for permission to build.”

RICS suggests that with the increase in devolved powers and funding to cities and LEPs, the government needs to set out clearly how any new powers will work and where property sits within any new funding settlement. 

“The property sector needs to know the government plans on property taxes from business rates to inheritance taxes. Without clarity we shall lose investors and there will be no incentive for the speculative  we need to deliver property-led growth.” it said.