Andy Sommerville, Director at Legal Futures Associate Search Acumen, the property data and insight provider, comments on the Chancellor’s Autumn Statement:
The Chancellor’s Autumn Statement has provided some clarity around the Government’s plans in the near future, setting the stage for what could be their final curtain call before another election is called in 2024. Following a testing economic year across the board battling inflation and rising interest rates, there has been mounting pressure for the Chancellor to ease the highest tax burden the UK has seen in more than seven decades. Sceptics will have watched Hunt announce tax reliefs this afternoon considerable astonishment, and certainly the business community welcomes any measures to stimulate growth as we head into a new year.
We are hugely encouraged by the Government’s commitment to continuing their AI agenda following the Summit hosted at Bletchley Park last month. Progress here must remain a high priority as UK businesses work towards the country’s ambition to become an ‘AI superpower’ as mentioned by Hunt. We have seen first-hand the impact of the use of AI on the property market as a business who has been at the forefront of this transition, and are pleased to hear that an additional £500m of funding has been made for UK AI.
The change of business rates via an extension of the 75% discount of business rates for hospitality, retail and leisure sectors and the decision to make permanent ‘full expensing’ business tax, will put the UK’s rates amongst the most competitive business investment taxes in the OECD (The Organization for Economic Cooperation and Development), with the aim of striking a balance between encouraging business growth versus raising tax revenue. This extension of business rates relief, which was due to come to an end on 1st April 2024, will be welcomed with open arms by sectors that have been hit hard in recent years. Small business owners will be particularly encouraged by the freeze on the small business multiplier for business rates, which they have relied on since the scheme’s inception.
The Chancellor’s announcement of some reform to our ailing planning application process will be positively received across the board by the property industry. Whilst this is largely focused on infrastructure, it paves the way for more reform in the near term by the current Government. There has been an unprecedented planning backlog in the last few years, fuelled by Covid, but kept ablaze by inefficient systems that have notably held back developers from progressing with much needed construction across both the residential and commercial sectors. Providing local authorities with monetary incentives to cut planning application timescales is an encouraging step in the right direction. An investment of £50m into the system is the step the industry needed after feeling deflating by yet another turntable of housing ministers.
Announcement of three new investment zones in West Midlands, East Midlands and Greater Manchester with another due in Wrexham and Flincher, will encourage investment and economic growth in these areas, as will the tax relief extension from five to ten years for the existing 12 investment zones. More monetary investment in these areas is bound to attract higher property transaction rates as businesses feel the impact of this support, helping to keep the property sector moving in these areas.
Overall, there are some positive takeaways to be had from the Chancellor’s statement today, with more economic stability on the horizon than there has been for the last few years. We hope to see some of his announcements lead to meaningful changes that can benefit the property industry, encouraging growth and investment as the macro-economic landscape improves.
