Chancellor of the Exchequer Rishi Sunak today announced a raft of new measures designed to carry UK people and businesses out the other side of the Covid-19 crisis. Announcements included the extension of the business rates and stamp duty holidays. Follow below as Property Week brings you live reactions to the announcement from across the real estate industry.
Jace Tyrrell, chief executive of New West End Company:
“The Chancellor’s announcement of substantial economic support should be broadly welcomed. However, it delivers too little for major commercial centres missing out on tourism and office workers where rebuilding traffic, trade and tourists will require years of effort. Targeted relief and support is needed for centres such as London, Birmingham and Manchester, where recovery will take much longer. It cannot be a one size fits all approach.
“For the Government’s support to be successful, we must also be given more clarity around the issue of state aid in the wake of our departure from the EU so that businesses with multiple stores can be sure that they won’t miss out on funding due to regulations on state aid cap.”
Melanie Leech, chief executive of the British Property Federation:
“While Covid-19 has taken a devastating toll on public health, the economic scars will no doubt also run deep. Recovery will require the Government to be bolder over the next year, particularly to meet its ambitions in relation to decarbonisation, but today’s Budget will have provided confidence to hard-pressed businesses on our high streets that government support is far from over, and that they won’t be left to fall at this final hurdle as we emerge out of lockdown.
The extension of the furlough scheme, £5bn of re-start grants and the business rates relief extension will bring many retail, hospitality and leisure businesses back from the cliff edge, providing them with much-needed breathing space as they prepare to re-open their doors to the public.
“Longer-term town centre recovery, however, will require root and branch business rates reform. This can has yet again been kicked down the road, but fixing business rates is fundamental to any ambition that wants our high street businesses to start planning for their futures beyond the next few months.
Vivienne King, chief executive of the Shopkeepers’ Campaign:
“While I’m pleased the Chancellor has recognised the essential need to support bricks and mortar retail with extensions to the business rates holiday, the truth is that business rates relief is no more than a temporary fix for an embattled sector and retail property owners are still denied equivalent relief on empty units which they cannot let - where’s the justice in that?”
“It’s clear the business rates system is totally out of step with the current economy. Retail meets around 25% of the bill which with a corporation tax increase takes the total tax bill paid by our high street businesses to even more unsustainable levels. If we want to safeguard the future of our town centres which are the lifeblood of our healthy communities, it is now even more critical we see the fundamental reforms that the Chancellor has promised, which include deep cuts to rates from April 2022.”
Matthew Pratt, group chief executive of Redrow:
“Overall today’s Budget gives hope for the UK’s recovery, and we welcome the boost in funding for apprenticeships, which will help encourage a vital stream of talent into the construction industry. The stamp duty holiday extension will be welcome news to those buyers caught up in the home buying process and who may have otherwise missed out on a saving, and the element of tapering between June and September will also be welcome to a number of new market entrants.
“However, in the medium-term and beyond October, we would like to see wholesale reform of this tax, as stamp duty outside of the current holiday is a barrier to people moving home, and it shouldn’t be. Facilitating mobility is especially important to the UK’s recovery as we move out of the Covid-19 lockdown and people find themselves needing to move due to job changes and other important life stage reasons.”
Julie Hirigoyen, chief executive at UKGBC:
“In his speech today, the Chancellor insisted that this country needs a real commitment to green growth and to create jobs where people are. However, ‘build back business as usual’ would be a more fitting description for the Government’s plans to build back better.
“We are still none the wiser about the fate of the Green Homes Grant scheme, which just a few short months ago the Chancellor told us would support over 100,000 jobs in green construction up and down the country. UKGBC, together with many others in our industry, have strongly advocated that the £1.4bn of unspent funding be rolled over to 2021/22, but today’s Budget leaves both industry and householders still in the dark.
“Beyond the opportunities for green investment offered by the Infrastructure Bank and new green gilt and retail savings product, this Budget appears to ignore the huge part that greening our buildings can play in delivering our post-Covid economic recovery. Tackling carbon emissions from buildings – particularly the existing housing stock – is not easy, but we cannot afford to duck the challenge any longer.
Tim Beattie, head of UK rating at JLL:
“We welcome the government’s announcement that eligible retail, hospitality and leisure properties in England will benefit from a £6.835bn extension of the existing relief scheme and receive 100% business rates relief from 1 April 2021 to 30 June 2021 and 66% business rates relief for the period from 1 July 2021 to 31 March 2022. The second tranche will be capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties.
“We also welcome the government’s announcement that businesses, such as supermarkets, that did the right thing by repaying business rate relief, will be no worse off from a tax perspective than if they had paid business rates in the first place.
“The elephant in the room remains those sectors and property types, such as offices and car parks, which are also suffering as a result of the pandemic and will still not receive any relief despite the severe restrictions effectively imposed upon them during each lockdown. The government should therefore ensure that the thousands of rate appeals made by businesses are fast tracked to a swift conclusion to help alleviate the pressures these businesses also face.”
Nick Whitten, head of UK living research at JLL:
“The housing market has got the extended holiday many were hoping for and the clock is now effectively ticking for new buyers who haven’t yet started the process of purchasing a home to take advantage of a reduced stamp duty charge.
“According to Rightmove data it has taken an average of 54 days to sell a home since the holiday was introduced in July, down from an average of 70 days in the 12 months prior. Assuming the average time to sell a home remains at the current level, aspiring buyers have until 7th May to begin a purchase to take advantage of the holiday extension.”
“Overall the Stamp Duty holiday has provided a much-needed confidence boost to the housing market following its full closure in March last year. However, its previous cliff edge ending on 31st March always risked seeing sales fall through increasing anxiety for aspiring purchasers. The extension will provide welcome relief to those purchasers and open the door to additional buyers. There now needs to be clear signposting introduced to ensure the cliff edge is not just pushed further down the road.”
David Parker, head of rating at Savills:
”The extension of the Business Rates relief to the retail, leisure and hospitality sectors is welcome, although the extension of 100% relief for only 3 months will be of limited real value as businesses standing to benefit from this won’t be able to fully open before the end of June in any event. Charging one-third of their rates liabilities from the end of June onwards will likely push many businesses to their limits as they seek to recover from a negative position of high debt and a need to re-build their businesses from the ground up.
“However, the cap of £2m per business will be the most disappointing aspect for many. Whilst this leaves our smaller to medium-sized businesses to benefit from the extended relief, our bigger businesses, groups and organisations, who may struggle to recover, will see negligible benefit.
”Whilst it is a relief to see no further punitive supplements added to the Business Rates bills for other sectors, the elephant in the room that is the excessive annual multiplier applied to all Business Rates bills remains in situ and needs to be addressed in the Autumn review.
Andrew White, head of residential at Colliers International:
“The stamp duty holiday helped to keep the housing market moving during a period of uncertainty for the UK economy. Extending the holiday until the end of June is right and fair for people who have deals agreed already and have been delayed by the long legal processes, and to prevent these deals falling through. It’s also good that there will be a staged return to the normal level in October.
“However it’s disappointing that the duty is in place at all. It would have been better if it was scrapped for properties worth under £500,000 permanently and a higher tax was instead applied to super-prime properties.
Keith Cooney, national head of business rates at Knight Frank:
“In probably one of the most anticipated Budgets outside of wartime, the Chancellor today announced further support for businesses with an extension of the business rates relief for retail, hospitality and leisure for a further three months with an additional 66% relief for the remainder of the year.
“These targeted measures are welcome in that they now exclude those businesses which were largely unaffected by the pandemic like the supermarkets.
“In stark contrast, the continued absence of any rates support for the rest of the business sectors impacted by the pandemic will clearly not assist the much needed economic recovery. The Chancellor could have cut the Uniform Business Rate across these sectors to offer some relief and it is a missed opportunity.
“It is hoped that the Budget’s absence of any other business rates reforms mean that they are just delayed for a further announcement rather than ignored it as they have been over the last five years.”
David Jones, head of business rates at Avison Young UK:
“Rishi Sunak’s budget today is without a doubt the most important to be delivered in peacetime – with much resting on his ability to kickstart the economy, target distressed businesses and preserve jobs. While we welcome the continued short-term aid for businesses in the form of business rates relief for the retail and hospitality industries, there are still a great many others who have been left out in the cold from today’s measures. The restrictions and caps in place have massive implications for businesses that trade from more than one premises. This saves the Chancellor significant funds, but for medium to larger businesses the relief is severely capped and we question how the Chancellor arrives at a total package of measures under business rates adding up to £6 billion. Also, for larger airport businesses in particular, the £4 million cap is negligible compared to the impact CV-19 has had on their businesses.
“There are also a lot of things we asked for that the Chancellor has not announced. Around two-thirds of businesses have had to pay rates during the crisis despite being severely restricted on the extent of their commercial occupation. They are not being supported by a slow-moving appeals system or the cessation of negotiations with the Valuation Office Agency, and what we really needed today was the green light to resume negotiations so that we can reach agreement, fast-tracking distressed businesses, to provide much-needed cash returns quickly.”
Dean Clifford, co-founder of Great Marlborough Estates:
“Homeownership remains the aspiration for the vast majority and it is right that the government’s housing policy looks to support that.
“These government-backed mortgages will help first-time buyers get onto the housing ladder and drive activity as the stamp duty holiday and Help to Buy are wound down.
“Yet encouraging banks to lend to first-time buyers can only ever be part of the solution. Too much demand-side stimulus without increasing supply risks stoking an unsustainable housing bubble.
“The bigger picture involves increasing housing delivery across the board which can only be achieved by having a better resourced and designed planning system.”
Keith Hardman, head of development and strategic advisory UK for Cushman & Wakefield:
“Today’s budget announcement that the UK Infrastructure Bank is to be located in Leeds is welcome news for the city. It builds on Leeds reputation as a financial centre of excellence – the city is home to a substantial cluster of banking - with 30 national and international banks, accountancy with 150 firms including the Big Four, and a growing insurance sector. The city exports £2bn in financial services. The location of the UK Infrastructure Bank is a further boost to Leeds aim to develop as a leading location for fintech and insuretech - the city is home to the UK’s first fintech accelerator outside of London.
John Tonkiss, chief executive of McCarthy Stone:
“While this decision is the right one for the short term, we need a better long-term solution for retirement communities. Stamp duty is a key reason why older people don’t move, yet we know millions are keen to downsize. Exempting last time buyers moving into retirement communities from paying stamp duty would help many more live in housing suited to their needs, bring down public health bills and free up the housing chain for younger people. It would be a win for everyone.”
Michael Voges, executive director of ARCO, said:
“You can’t help someone buy a house when that house doesn’t exist. Stoking demand through mortgage guarantees and subsidies will not solve our housing crisis and is the equivalent of shovelling yet more cash into the furnace of rising property prices.
“We have a critical lack of housing in this country for younger and older people alike. We urgently need to address this by distributing existing housing more efficiently – expanding good quality housing for older people through planning and regulatory reform would cost the Treasury little, help meet the challenges of an ageing population, and stop prices getting even more unaffordable for younger people.
“Making housing work for different generations is not a zero sum game – and we will all have a better place to live if we focus on supply as well as demand.”
Hugh Seaborn, chief executive of Cadogan:
“While we welcome the new £5 billion high street rescue packag, this much-needed cash injection will only provide temporary relief. It is vital that longer-term support is continued through business rates relief, at least for the next year - particularly for independent retailers and restaurants for whom the rates are unsustainable.
There is also a need for private landlords to play a crucial role in supporting these businesses. Cadogan will continue to champion independents and other smaller businesses across Chelsea, investing in our Business Community Fund which has so far delivered over £20million in financial help, cash flow support and other resources to our customers.
Further reassurances from the government and effective communication and collaboration between tenants and landlords are both crucial to safeguarding the future of so many special destinations that together make London a truly international city.”
Victoria Hills, chief executive of the Royal Town Planning Institute:
“We all welcome the return of non-essential services to the high streets and local businesses will helped by the announcements today. However, we are concerned that our high streets’ revival from the pandemic will be undermined by the proposals by Government to allow developers carte-blanche to turn our high street shops and services to residential without going through the democratic planning process that supports a mixed-use approach to placemaking. This will really impact local economies and communities at a time where it is vital we re-open our high streets.
“Housing supply could have been increased instead through Government loans guaranteed for developers to build on currently uneconomically viable sites within our cities and towns. We believe that the chancellor has missed a trick.”
Cllr James Jamieson, chairman of the Local Government Association:
“Tackling the economic challenges ahead is a huge task. It is councils who know their local areas best and must be able to lead efforts to rebuild and level up our economy, get people back into work and create new hope for communities. It is good that councils have been placed at the heart of the delivery of new funds such as the Levelling Up Fund and Community Renewal Fund. We look forward to working with Government on the detail but are concerned by the prospect of competitive bidding processes at a time when councils want to be fully focused on protecting communities and businesses from the impact of the pandemic.”
Ben Beadle, chief executive of the National Residential Landlords Association:
“The Chancellor’s pledge to do whatever it takes to support those affected by the pandemic will ring hollow for thousands of tenants and landlords across the country.
“The Government has admitted that private tenants have been hardest hit by the pandemic, and figures show that most of those in arrears are unable to access emergency housing support from local authorities.
“Despite this the Chancellor has failed to provide the sector with the financial support needed to pay off rent debts built as a consequence of the virus.
“Without help to get arrears cleared, many tenants face the prospect of losing their homes and having damaged credit scores, which will undermine the Government’s efforts to help generation rent become generation buy.”
Jordan Rosenhaus, chief executive of TopHat:
“It’s great to see the Government continuing to champion modern methods of construction in today’s Budget with the creation of an ‘MMC taskforce’, which will be backed by £10m of seed funding.
“If, as an economy, we’re going to reach our 2050 net-zero targets while simultaneously ramping up housing delivery, it’s going to be vital that the housebuilding sector is encouraged to diversify supply. By manufacturing offsite, we’re able to achieve carbon savings by producing better-performing homes that consume less energy, leak less heat and are made from more environmentally friendly materials.
“Our product’s sustainability credentials also translate into huge cost savings for consumers, who, because of our homes’ better energy performance, save hundreds on their heating bills every year. These cost savings are vital, and should be better communicated to consumers, as there is an urgent need to ween consumers off decades-old, polluting technology – such as gas boilers – and onto more low-carbon technologies – such as solar panels and air source heat pumps.
“Unless more homes are built in factories, we won’t meet net-zero or new house building targets.”
Peter Hardy, partner at Addleshaw Goddard:
“Of course, everyone already knew about the government’s extension of SDLT relief, but the transitionary period — halving the rate between July and September — was a surprise. Many were worried that the government was simply kicking the can down the road, resulting in another cliff-edge moment only a few months from now, although that may happen then of course. The move will almost inevitably fuel house price growth, which will be a good thing for many but perhaps not so positive for those looking to get on the property ladder and there is a concern that it will make house prices unsustainable leading to a crash with a particularly bad impact for negative equity for those who take the new 95% mortgages.”
Olivia Harris, chief executive of Dolphin Living:
“It is absolutely right that the government continues to focus on protecting jobs in London, especially within the key sectors of hospitality and tourism, as we hopefully approach the end of the pandemic. However, as we look to the longer-term recovery it is more important than ever that those working within these industries, and our city’s vital key workers, have access to housing which is both affordable and located close to their place of work. Therefore, we are calling on the Chancellor to commit to a once in a generation expansion of affordable house building within London. This must include a significant proportion of intermediate rental housing for those critical workers who are unable to afford local market rents upon whom London relies, as part of the overall pledge to support the capital’s social and economic recovery post the pandemic and level-up the city.”
John Webber, Head of Business Rates at Colliers:
”Although the Chancellor has followed through on expectations that he will extend the current 100% 2020/2021 business rates holiday for the retail, hospitality and leisure sectors- to do so for only three months to the end of June and then provide an up to two thirds business rates holiday for the following nine months will not be enough to give businesses proper time to recover from the impact of the pandemic and lockdowns, particularly given the staggered re-openings. In Scotland a 12 month extension of the rates holiday has already been announced.
“We had campaigned for at least a 6 to 12 months full rates holiday, allocated on a needs basis. The Budget has also done little to help businesses in other sectors who have not had the advantages of the business rates holiday who have also seen genuine hardship including the aviation industry, businesses in manufacturing (particularly those that supply retail/hospitality and leisure) and many offices businesses.
”The Chancellor has failed to do anything about the hundreds of thousands of MCC business rates appeals snarling up the system, tackle the business rates multiplier now at outrageous levels of £0.51, commit to a 2023 Rating Revaluation, clarify confusing rules on State Aid limits or bring in a business rates arrears moratorium for those businesses, who because of the pandemic have been unable to pay their business rates bills. It’s all been desperately disappointing!”