The Chancellor, Philip Hammond, issued his Autumn Statement on November 23 and as anticipated, the property sector featured quite heavily. We responded to the three main areas the Chancellor focused his attention on: Infrastructure, Tech and Housing.
Colin Wilson, Head of UK and Ireland, said:
“The Chancellor’s commitment to the ‘brain belt’ expressway between Oxford and Cambridge is very welcome. Investors seek both high speed physical and digital communications and this will do much to increase investment and opportunity across a broad swathe of the country.
“The property sector has held up remarkably well since the Referendum. Fundamentally we are seeing a desire by many to operate “BAU” (business as usual). Volumes are down but there is still significant activity. To some, this is because a ‘hard’ Brexit is unlikely; to others, a belief that whatever form it takes, our leaving the EU will offer as much – or more – opportunity in future."
“Whatever the scenario of our exit, the UK needs an infrastructure that will either help offset the negative aspects of our departure or take advantage of the opportunities it might offer. It must also be designed to protect our position as a world leading economy. In a low cost/low growth environment it is the perfect way for the Government to influence economic activity."
“So far, Brexit has certainly created a heightened level of uncertainty in the economy that has also increased the aversion to risk for many. That’s why we are pleased the Chancellor has provided some detail on specific infrastructure projects across the UK. Plans with tangible, measurable benefits will likely prompt further investment from the private sector to leverage the Government stimulus.”
Juliette Morgan, Global Head of Tech, said:
“Investment to push UK to forefront of future technology is extremely laudable but the Government must follow up with proper delivery and overcome sticking points such as the planning system in order for the potential benefits to be realised."
“The ongoing struggle with rural broadband in many parts of the country show the pitfalls of a half-hearted approach to rolling out technology."
“Investing in new technologies has greater potential to deliver a positive return for the Exchequer than investment in costly but old-fashioned options."
“We are in the early stages of the Internet of Things but it has the potential to fundamentally alter our everyday lives in a positive way, boosting efficiency and productivity. But again, we can only benefit if Government overcomes the hurdles.”
“Growing UK technology firms need serious capital to fuel expansion which is often conducted – by necessity – at extreme pace as they scale up to serve large clients. Often they are crying out for British investment but they naturally go where the money is. It is heartening to see the Chancellor recognise this by injecting an additional £400 million into venture capital funds through the British Business Bank. This could be an invaluable source of capital for early-stage UK tech firms.”
Eleanor Deeley, Residential Partner, in the Birmingham office, said:
“The government’s new £1.4 billion to fund 40,000 new affordable homes (£35,000 per home) is a very welcome contribution to the affordable market. There are many ways in which this could be utilised and whether it is through the direct purchase of land, or whether it is through gap funding across more sites it will certainly go a long way to delivering affordable housing . However what we need now is further detail on how this can be accessed and utilised by developers in order to deliver more housing."
“The introduction of a right to buy for housing association tenants reinforces the government’s policy of supporting home ownership. There is yet to be the detail announced as to whether this would be a ‘buy as you go’ scheme which would allow housing association tenants the right to contribute to the purchase of their home through monthly payments or whether it will be a one off payment."
“The former would be preferable as this will assist those Housing Association Tenants who typically pay 47% of their take home income in rent. What was lacking was any policy to replace those homes which will be sold through this scheme as there is a foreseeable but unintended consequence to this policy that the affordable housing stock could be considerably depleted in the coming years.”
Overall media reaction to the Autumn Statement was muted. Although there was considerable concern the Chancellor had to forgo his predecessor George Osborne’s target to eliminate the public deficit, there was widespread recognition the Referendum vote to quit the EU had limited Mr Hammond’s options.