The Chancellor’s attempts to help the high street and the solve the housing crisis were welcomed by property market leaders – but they agreed that he needed to do more.
David Westgate, group chief executive of Keynsham-based Andrews Property Group, pictured right, was delighted with Philip Hammond’s move to abolish Stamp Duty for all first-time buyers of shared ownership properties up to £500,000.
“I’ve made no secret of my views on how punitive Stamp Duty charges have exacerbated an already sluggish market and any move that will lessen the impact felt by purchasers is good news,” he said.
“It doesn’t, however, go far enough and I maintain the view that a complete and thorough review of Stamp Duty is required. Such a review would result in radical change and whilst that might mean lower individual receipts in to the Exchequer, the impact it would have on overall volumes would at least cancel that out.”
Tim Davis, head of global property services firm Cushman & Wakefield’s South West regional office, pictured below, was pleased with the announcement on Business Rates Relief and the Future High Streets Fund, but said these alone would not meet the challenges facing town and city centre stakeholders.
Funding was a key issue but measures to expedite change and address what, in many cases, amounts to market failure were at least as important.
“Changes are necessary to provide public and private sector partners with greater agility and ability to allow town and city centres to ‘right size’ and ‘right mix’ the retail offer, introduce other uses, create open space, infrastructure and access improvements all of which are vital in building sustainable, fit for purpose, town centre communities,” he said.
He said there needed to be an extended period for empty rates relief for new commercial development, where the timing is linked to the implementation of planning consent to encourage accelerated development.
Martin Davenport, rating partner at Bristol commercial property agent HTC and past president of the Rating Surveyors Association, said: “It is pleasing to see that the government has decided to do something about the current state of the high street.
“Empty rates continues to be an issue and an extension of the empty rate relief from three months to six months would have been a sensible change. This has not happened. I strongly recommend that any retailer with a rateable value of around £52,000 should look into submitting a challenge with the aim of going below the £51,000 threshold.”
Tim Davies, head of South West and Wales at Colliers International, pictured right, agreed that The Future High Streets Fund was a good idea.
“Some local councils have already been working hard to protect and invest in their town centres, including North Somerset, which recently purchased the Sovereign Shopping Centre in the centre of Weston-super-Mare,” he said.
“However, it has always been more difficult to protect the high street, where there is a disparate ownership often with adjacent properties being owned by a mix of landlords, including the large pension funds, foreign investors, development companies and local individuals. Some of these investors are seeking to maximise their short-term rental income whereas others may be more interested in their long-term asset value.
“Whilst £55m has been specifically targeted to restore historic high streets, in the South West the towns with extensive conservation areas and listed buildings have tended to outperform the other centres with rents increasing in Marlborough, Cirencester, Sherborne, Dorchester, Cheltenham and Wells.
“However, there is the opportunity for the more major cities in the South West to promote their historic quarters and for funding to make a substantial difference to the smaller towns, such as Clevedon where most of the local traders will also benefit from the rates reduction. There are still a large number of vacant upper parts, above shops, which could be converted back to residential use.
“The investment in physical infrastructure is vital for the high street to compete against the ease of internet shopping and out-of-town retail parks, to provide an attractive easily accessible environment, able to accommodate an ageing population. It will be interesting to see how the funding will be targeted.”
Simon Peacock, lead director at JLL in Bristol, said: “Contrary to the Chancellor’s statement, in which he recognised the high fixed cost that business rates represent for business, by limiting the relief to two years until the Revaluation in 2021 this is still just a still a temporary sticking plaster rather than a permanent fix to a problem that isn’t going to go away.
The only way of to provide a medium to long term solution is to reduce the unacceptably high level of taxation itself (UK Business Rates are the highest in the developed world).
The government should have taken steps to have a maximum multiplier for 2019/20 reducing it for 2020/21 and then to fix the multiplier at a maximum of 40% for the three- year period of the 2021 Revaluation once income from the new Digital Tax comes on stream.
“The government also needs to focus on the wider business rate system and shelve the disastrous Check Challenge Appeal process which is still not fit for purpose over 18 months into the 2017 Revaluation.
“It could quite easily and quickly revert to the scheme operated in Wales freeing business from the unnecessary red tape and bureaucracy required by Check Challenge Appeal. The government’s election manifesto pledged to reduce red tape for business and axing Check Challenge Appeal would be a huge step forward to fulfilling a key manifesto commitment.”
