The property industry has reacted furiously to a budget that ‘ignores’ the industry.
Despite introducing a year’s delay to the community infrastructure levy, pledging to look at tax increment financing and some technical changes on REITS, as well as some help for the housing industry, the government failed to make the sorts of wholesale change that the industry was hoping for on REITs, empty rates, regeneration and the private rented sector.
Francis Salway, British Property Federation president and chief executive of Land Securities, said: ‘The chancellor made a declaration to be fair and to support long term investment but the government's refusal to reinstate empty rate relief wholly undermines this statement, particularly at a time when occupiers and developers are being equally hit by the downturn.
‘The statement of the government's intention to explore new funding mechanisms with local authorities is a welcome recognition of the BPF's work to promote interests in tax increment financing which has been so widely used in the USA.’
Liz Peace, British Property Federation chief executive, said: 'It defies logic that during the worst recession for a generation the government should ignore some very simple practical solutions laid on a plate in front of it that would cost practically nothing and would have helped the property industry to recover more quickly from the effects of the recession and get back to doing what it does best for society namely building and managing the places we need for business, shopping and leisure.'
‘We suggested a number of ways of temporarily modifying the REITs regime which would have had virtually no cost for the Exchequer and these have been ignored. We had also pressed for one very simple change that would have encouraged institutional levels of investment in an alternative stream of housing provision through renting, namely the disaggregation of stamp duty on bulk purchases, but this has also been ignored. There is no empty rates relief, despite the traumatic decline of the high street.’
‘The measures designed to support housing sound impressive but it is not wholly clear how much new money is really on offer and how easy it will be for developers to access these funds – a large part of which must be spent this year.’
Ian Coull, chief executive of Segro, said: ‘It is disappointing that the Government has not announced any new plans to abolish empty rates. Empty rates will continue to see buildings demolished and occupiers who need a helping hand will continue to struggle.The real disappointment is the lack of any real changes on REITs which is where the real opportunities for turning around development existed.’
Peter Cosmetatos, director for finance and investment at the BPF, said: ‘This was a very disappointing Budget for the property industry. This Government, which has been willing to throw countless billions at a pointless cut in the VAT rate and at the financial sector, has refused to listen to a small number of sensible, targeted industry representations which would have entailed little (and in some cases no) cost to the Exchequer and which would have given valuable support to businesses in the current environment.’
‘This was a Budget of missed opportunities from a Government that seems to have lost its way.’