Uncertainty over world events remains a concern for some of our partners after Chancellor Rishi Sunak’s Spring Statement.
We asked for thoughts on the statement and, while it was less radical than some, the fears of the effects of the Ukraine situation were in line with feedback in the retail world reported by Thames Tap, where there are signs potential occupiers are becoming nervous.
Mike Righton, managing partner Thames Valley for RLB, said: “Rishi Sunak’s Spring Statement reconfirmed what we all know, that economic, political, and global uncertainty remains.
“This will have clearly have an ongoing impact on our economy and the construction industry. Even with the promised focus on ‘people, capital and ideas’, the welcomed Employment Allowance and immediate relief on fuel duty, the rise in inflation and cost of living for businesses will have a huge impact on profitability and viability.
“This is especially true for SMEs within our supply chain who have battled through the pandemic and the UK leaving the EU.
“So it’s really important that we act together to support these smaller businesses in the Thames Valley and across the region which play such a critical role in the built environment sector and the UK economy.”
Brian Dowling, partner at Boyes Turner, said: “Given the impact of the war in Ukraine and the ongoing financial recovery from Covid, there was perhaps never going to be much financial or fiscal support for the development industry.
“It would be nice if Government remembered that the development sector has maintained employment and delivery over the last few years, and could perhaps be acknowledged or even rewarded with some much-needed, targeted reforms to the existing planning system, which is currently restraining the delivery of housing.
“Particular financial measures that may be of interest to developers include the five-year VAT reduction to zero per cent for ‘energy saving measures’ which will make these more viable and assist new sustainable developments and crucially also help with retro-fitting and conversion.
“The Treasury also reiterated that there will be business rates relief for onsite renewable energy generation. This measure should help bring forward EV charging infrastructure at scale, and hopefully reduce demand for gas, oil and other products from unsuitable suppliers.”
Mike Shearn, chief operating officer for Haslams Estate Agent, said: “We had hoped for something that would have encouraged more stock to come to market – for both sales and lettings – and also some help to ease the pressures on household incomes.
“In reality, we had nothing of any substance and so I expect the disconnect between supply and demand to continue resulting in more hardening of capital and rental values in the short term.
“In the medium to long terms we’d still like to see some ‘levelling-up’ between secondhand and new homes and also more support for private investors as the overwhelming number of support packages have only benefitted corporates over the past 10 years.”
David Jones, managing director of Evans Jones, said: “The Spring Statement is much as expected with fuel duty reductions and further fiscal stimulus for green technologies, and extension of R&D tax credits.
“The scope for the Chancellor to announce significant changes was evidently limited, with slowing growth, increasing inflation and worldwide uncertainty following the Russian invasion of Ukraine.
“The direction of travel is, however, clear: support for decarbonising the UK via tax breaks and other incentives, support for investment and R&D and the freezing of business rate multiplier for another year.
“Data published by the ONS confirm that input costs for business now exceed 14 per cent, however consumer prices are rising at around six per cent, indicating that business are absorbing a large proportion of increased cost via reduced profit and hopefully other efficiencies.
“Business reaction to the statement has been muted, which I would suggest indicates that Sunak has got the balance about right. As a business owner, my own view is that whilst confidence remains high, there are significant underlying issues which could easily knock that confidence including world uncertainty, inflationary pressures, reduced disposable incomes, reduced growth forecasts.”
Image: UK Government, OGL 3 <http://www.nationalarchives.gov.uk/doc/open-government-licence/version/3>, via Wikimedia Commons.
© Thames Tap (powered by ukpropertyforums.com).
Sign up to receive your free weekly Thames Tap journal here.