Friday, 2 December 2011

George Osborne’s Autumn Statement

There is some good news and some bad news for the property industry in George Osborne’s Autumn Statement delivered to the House today. Another £5 billion of infrastructure funding on top of the £1.3 billion already promised, and a possible further £20 billion of funds from UK Pension Funds will certainly provide a boost to the economy not only from the work they generate, but also from the increased accessibility that will result for the regions which benefit. Couple that with the intention to make planning appeals faster and more transparent and we might actually get to see some of these projects starting on the ground. The rural Growth Networks and the already announced Growing Places Fund of £500 million will also help to deliver new much needed housing. Enterprise Zones have worked in the past and should help to stimulate growth but only if businesses are strong enough to take advantage of the opportunities.

Not such good news though is the end of the stamp duty concession for first time buyers. Whilst Osborne is convinced that the concession did not have much effect, it certainly did ease the path for those buyers who were in a position to enter the market and it remains to be seen whether the Government mortgage guarantee scheme to enable buyers of new homes to get a 95% mortgage will be any more effective. And somewhat pie in the sky is the Government’s affirmation that it will support new locally-planned large scale developments ‘which have clear local support’. The abolition of the Regional Spatial Strategies has removed what was a convenient policy for local and national politicians in favour of development to hide behind should vociferous parts of their electorate oppose development. Now they have no option but to listen to those voices – and that coupled with the Coalition’s slavish adherence to the Green Belt, much of which was set out in the 1940’s and ‘50’s and now totally anomalous, is not going to make development any easier.

The Chancellor has a difficult tightrope to walk, to provide what stimulus he can to our struggling economy on the one hand, whilst continuing to reassure our funding partners that we are serious about tackling the deficit. He has probably succeeded in that aim but it is still going to leave us with a challenging 2012 and beyond.

Chris Haworth
Head of Commercial Division

Commercial, Cambridge
T: 0207 016 0729

No comments: