Set to deliver a Budget just four weeks into his new role, chancellor Rishi Sunak will be feeling the heat while he prepares for the big day.
Now more than ever, the Conservatives will need to unveil a Budget that shows the government has shaken off the three-year Brexit stalemate that stunted the country’s progress and outline a vision for the future. This, undoubtedly, is a vision that will need to keep newly acquired voters in regional areas happy.
But what exactly does property most want to see?
Business rates changes
Like most, a change in policy around business rates is high up on Leeds City Council’s Budget wish list.
Lisa Mulherin, the council’s executive member for climate change, transport and sustainable development, says: “Measures to allow local authorities to retain more of their business rates growth above the baseline, while reducing the volatility resulting from appeals, would be welcomed.”
But Robert Hayton, head of property tax at Altus Group, says a major overhaul of business rates would be “counterproductive” and instead advocates for more modest reforms.
“Abolishing downward transitional relief, which sees business rates fall significantly more slowly than rateable values, would help reduce the burden on retailers and better reflect the reality of the high street,” he says.
The Treasury should also look to remove the annual CPI adjustment to the uniform business rate, Hayton says, which “creates unfair upward pressures on business rates bills” through the “coupling of inflation with organic growth”.
Planning reform
Ministers have promised a raft of measures to speed up the planning process and fix a system that is “on its knees”. Developers will be keeping an eye out for solid planning upgrades and expect big changes in relation to permitted development and permission in principle, with the potential for even more radical reforms.
“The key thing for any government at the moment is to sort out planning,” says Jonathan Vandermolen, chief executive of Vandermolen Real Estate.
“We just need a very simple strict set of rules that everybody understands. There just needs to be something that is not based on people’s opinions – it either ticks the boxes or it doesn’t. If you know what your starting point is, surely you’ll get over the finish line quicker.”
Vandermolen says debates over affordable housing and viability have rendered the current system useless, but automated systems and set affordable housing contributions could fix this. However, this might not be as popular as landowners might like: “Every developer, whether they like it or not, will use viability to try and get away with no affordable housing,” he says.
Affordable housing support
On that note, Paul Hackett, chief executive of Optivo, reiterates his call for long-term funding to deliver affordable housing.
“If we had a 10-year investment programme from government that enabled us to build through housing market cycles, we could do much more,” he says.
“What would be helpful on 11 March would be a down payment on that commitment to signal that there would be a process to make that funding.”
According to Hackett, the new government has a “golden opportunity” to forge relationships with willing housing associations to deliver its vision of home ownership.
Hackett says: “We would be very happy to be entirely open-book with government and to flex our balance sheet to deliver as many homes as we can and work together to achieve that goal.”
Restrained stamp duty rises
The government has been dangling the threat of a 3% foreign buyer tax for some time, claiming that a cooling of international sales would tackle house prices rises and help local buyers.
“We’d rather not see it, but we are expecting it,” says David Galman, sales director at Galliard Homes.
“What we are hearing is that there is going to be a foreign purchase surcharge, but it may not be as high as 3%. Developers will no doubt have to find a way of swallowing it, even if you share that pain with the purchaser.”
Galman says he is hopeful that new taxes won’t be compounded for second homes, where stamp duty already sits at 3%. He adds that he would like to see a lowering of “extortionate” taxes for high-end property.
Accelerate MMC
A revived focus on modern methods of construction in order to build more homes than ever is what Dave Sheridan, executive chairman at ilke Homes, most wants to see.
“The chancellor’s Budget should outline plans that encourage the expansion of the modern methods of construction that will help combat carbon emissions and ensure that housing delivery continues on an upward trajectory,” he says.
“Increased funding for Homes England to help scale up SME housebuilders and innovative new housebuilders will boost the number of new homes we build while driving growth and employment to the regions.”
More infrastructure
With HS2 in the bag, waved through by prime minister Boris Johnson in the House of Commons in February, could this be the time to announce further funding for other rail schemes?
The Midlands certainly hopes so. The sub-national transport body, Midlands Connect, has urged the chancellor to stump up funding for the £3.5bn Midlands Engine Rail programme. The scheme would see high-speed train services introduced between Nottingham and Leicester.
Maria Machancoses, director of Midlands Connect, says: “Government must deliver on its promise of an infrastructure revolution and repay voters across the Midlands who were so pivotal to its election success.
“I urge the chancellor to back Midlands Engine Rail to maximise the benefits of HS2, and allow our ambitious plans for the Midlands Rail Hub to move forward, better linking towns and cities across the region and levelling up the UK economy.”
Meanwhile, Ross Firth, project and investment executive at Scarborough Group, says connectivity in the North needs major attention from the Treasury.
The number of new votes secured in the North by the Tories in last year’s General Election means that the government needs to put its back into helping the delivery of major Northern Powerhouse projects, he says.
“We’d like to see firm commitment to rail infrastructure… most importantly, from a regional point of view, east-west connections,” says Firth.
“If the government can give some clarity in the Budget over those types of projects, that will have a massive impact on people’s day-to-day lives.”
Power shifts and levelling up
The prime minister has ridden into Downing Street on a campaign of “levelling up”, but will the chancellor deliver the finance and power for this?
John Keyes, chair of UK public sector at Cushman & Wakefield, is hopeful of “significant spending announcements”.
“Expect to see confirmation of changes to the Treasury ‘Green Book’ for investment appraisals. These will shift the balance of decision-making more to regions outside London and the South East,” he says.
Keyes highlights backing for the National Infrastructure Strategy and more money in the pot for the Towns Fund, but he is not convinced of any imminent devolution deals.
“Is the government ready to give greater powers to city mayors and local councils? I suspect not, but expect to hear an announcement about more central government activity and staff being sent north,” he says.
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