The Autumn Statement, November 2016 (commercial property perspective)
On 23 November, Philip Hammond, the Chancellor of the Exchequer, gave his first Autumn Statement. It will also be his last: he announced that next year, the budget will take place in Autumn with only a statement issued in Spring.
So what did he have to say?
You can read a report from Richard Eastwood on some of the key points including “the good, the bad and the so-so” here: Is the Autumn Statement Christmas come early or not?
Here are the highlights from a commercial property point of view:
- Growth is slowing: the Office for Budget Responsibility (OBR) has forecast growth to slow down and inflation to rise over the next two years.
- Letting agents’ fees banned: in a move that follows the Scottish approach, the government has banned letting agents from charging fees to renters. Examples of such fees charged include payments required when a new tenancy agreement is signed. This has come as a blow to letting agents and we have talked to several estate agents with letting businesses for whom this is a concern. For tenants, it comes as good news with potential savings of a couple of hundred pounds for each tenancy.
- Land Registry: the plans to privatise the Land Registry have been abandoned. This is good news. (You can read why we thought privatisation was not a good idea earlier this year here: Growing concern about the Land Registry.)
- Infrastructure boom ahead? “The government has put infrastructure at the heart of its economic strategy” and there was plenty of good news for the infrastructure sector – on top of the announcements about HS2 earlier this month (See HS2 route announced). Plans include investment in transport projects to reduce congestion and upgrade roads and public transport and acceptance of the National Infrastructure Commission’s recommendations for an Oxford-Cambridge expressway.
- Housing promise: there was also good news for the housing sector – and there’s no doubt that it was needed with the current lack of affordable housing. Hammond promise of £1.4 billion worth of investment to build up to 40,000 new affordable homes (including for rent and shared ownership) (plus more in London) will bring hope to many of those “only just managing” that their aspiration of owning their own home might be a little closer to realisation. Another £1.7 billion will be used to speed up the construction of new homes on public sector land.
- Housing infrastructure: a £2.3 billion fund was promised for a new Housing Infrastructure Fund for use on projects such as roads and water connections that will support the construction of up to 100,000 new homes. A Housing White Paper will be published to set out the government’s plans to reform and increase housing supply to improve affordability.
- New productivity fund: the creation of a National Productivity Investment Fund (NPIF) was announced to target 4 areas that are critical for improving productivity: housing, transport, digital communications, and research and development (R&D). On R&D, the NPIF will provide an additional £4.7 billion by 2020-21 in funding.
- On digital communications: £1 billion will be invested in full-fibre broadband and trialling 5G networks.
- Rural Rate Relief: the rural rate relief will increase from 50 to 100% in April 2017, (saving a business up to £2900 a year) and will be available to businesses in rural areas with a population under 3,000 (other conditions apply).
For more information, contact Karen Piontek or make an enquiry.
- The Autumn Statement in full
- Government press release: Autumn Statement 2016: some of the things we've announced
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