Budget 2012: the industry reacts
The profession responds to Chancellor George Osborne’s budget, including plans to raise stamp duty and invest in homes for the armed forces
Jonathan Hill, chairman of Scott Brownrigg:
‘Our soldiers deserve good homes and this will help achieve the program for improvement more quickly. Good to see some of the ‘Afghan’ saving benefit those who have risked their lives. We now need to see this spent very effectively.’
Greg Lomas of Foster Lomas:
From our point of view the budget could affect some clients, mainly those based offshore.It will be interesting to see how the new 15 per cent tax to be imposed on all properties over £2million which are bought via a company will affect the high end market. The other point to note is that since the Arab spring, Middle Eastern property investment seems to have increased in central London. That may change now.
Stamp duty rises will more than compensate for the lost revenue from the reduction in the 50p rate
In the last few years an awful lot of foreign investment in high end property has come into the UK and especially central London. The figures in monetary terms are staggering - billions rather than millions - and it has kept the high end residential market buoyant.
The new 7 per cent tax will probably result in a reduction in transactions and potentially more investment in existing property, no bad thing for architects.It’s a clever move and one discussed recently in the Guardian by Simon Jenkins. Everyone is commenting on the reduction in the 50p rate but my gut feeling is that these stamp duty rises will more than compensate for that lost revenue to the treasury.
Liam Baily, head of Knight Frank residential research:
‘The prime market, especially in London, will be able to absorb a new stamp duty rate at 7 per cent, with domestic and especially international demand for prime London property is likely to remain strong. The most obvious question is whether prices above £2m will fall in response to the new rate? There has to be an element of price adjustment, and we would expect tough negotiations around the £2m level. It is important to bear in mind that on average prime London prices have risen by 42 per cent in price since 2009, with no pause in the increase in values since the introduction of the 5 per cent £1m+ SDLT rate in April 2011. It seems unlikely therefore that the new 7 per cent rate will result in dramatic price changes.’
Geoff Barrett, Partner at Sidell Gibson Architects:
‘Development opportunities are always created by infrastructure expenditure so investment in rail, roads and airports will benefit the construction and development industries and their supporting design teams. As we are about to return to Libya we are pleased that additional help will be given to SME’s in their export efforts.
Any hindrance to mobility within a fragile market could affect demand lower down the scale
‘If changes to small company taxation improve cash flow and reduce administrative costs then these will be positive for most architectural practices.Additional help for research (and development) will in time spawn new businesses wanting new facilities. Enterprise zones may end up diverting development geographically but are another positive encouragement to investment. Stamp duty increases for properties above £2m may have unintended consequences. Although only a relatively small percentage of dwellings nationally fall into this price bracket, any hindrance to mobility within a fragile market could affect demand lower down the scale.’
Anna Scott-Marshall, the head of external affairs at the RIBA:
‘The 2012 Budget underlines the importance of new development and infrastructure in kick-starting growth in the economy. City Deals, the introduction of TIF and the expansion of Enterprise Zones could equip cities with the necessary tools to help them develop and grow. While the RIBA welcomes the additional funding for the Get Britain Building scheme, we urge the Government to ensure that developers and developments selected for funding meet the highest quality credentials so homebuyers benefit as well as house builders.
‘We look forward to seeing the details of the NPPF when it is published and comes into force next week.’
David Tonkin, Atkins’ UK chief executive:
‘Investing in our ageing infrastructure is vital for Britain’s economic recovery - creating jobs and providing the means for businesses to flourish and people to go about their daily lives. But if we want to see a short-term boost for the economy, the projects confirmed by the Chancellor, such as those planned to support growth in London and Manchester and the proposed further improvements to roads, railways, broadband and energy supplies have to be commissioned and delivered quickly and efficiently. In less than five years we have seen a significant area of east London transformed from an industrial wasteland into a world-class sporting venue for the London 2012 Games into what is one of the largest regeneration projects in Europe. This should serve as a benchmark for what we can achieve in terms of other major infrastructure projects across the UK in the future.’
Bob Robinson, chairman at national planning consultancy, DPP:
‘There were no real surprises in today’s Budget as is often the case with much of the content leaked to the press beforehand. Osborne’s comments reaffirmed what the Government had already said on the draft NPPF. There has been little change in the underlying focus although I expect the document to contain further clarification on ‘sustainable development’ and some other matters beyond the draft.
‘I welcome the investment in rail infrastructure in Northern England and suspect that many developers may well already be looking into the opportunities which may be presented through the private funding of road infrastructure.’