Tomorrow’s leaders must help shape our future success

By Melanie Leech, Chief Executive, The British Property Federation


  

Engaging in politics has always been important – but, with unprecedented change on the horizon, and a government ambition for place-based economic and social growth across the country - it’s more critical than ever before that the real estate industry has a strong voice in the development of policy. We are critical to the future economic and social wellbeing of the UK – our industry underpins all of our lives, and most, if not all, of the UK’s economic activity through the physical environments we create where we all live, work and relax. 

Political decisions being made now will impact on every facet of our industry and its customers for decades to come. That’s why the BPF is committed to ensuring that the  industry leaders of tomorrow are a part of our voice today, through BPF Futures, our new network for junior professionals. We are also delighted to work with organisations such as YEP which bring together like-minded young professionals with a passion for our industry. 

To understand why our industry needs to engage with politicians and with the Government of the day, you need look no further than this year’s recent Budget. 

There were many positives in the Chancellor’s Budget this year – building on the commitments to investment in infrastructure and in housing that have characterised this Government’s domestic policies. It was also good to see the devolution agenda reinforced when some had doubted the Government’s commitment after the departure of George Osborne.  All of this, together with ongoing detailed work both by national and – increasingly – local government should help to create a development pipeline that will provide investment opportunities and provide much needed signals to the construction sector that they have confidence in recruiting and training the workforce that will be needed (and that will likely increasingly come from the domestic workforce post-Brexit).

However, giving with one hand and taking away with the other, less positively the Chancellor also proposed that, from April 2019, non-resident disposals of UK property will become subject to Capital Gains Tax for the first time, meaning that international investors (and the many UK savers and pensioners whose money is managed by off-shore bodies) face increased taxation. Increased taxation will discourage essential investment in our towns and cities; on the physical fabric of many areas and on the communities that are crying out for better work, living and leisure facilities. And it seems the link between a better built environment and increased productivity – something this country urgently needs to address given its woeful position in the current OECD league table – has also slipped his mind.

Stamp Duty is widely believed to be damaging the housing market and changes were trailed before the Budget. The BPF called on the Chancellor to exempt the affordable housing element of the Build-to-Rent sector from the 3% SDLT surcharge, if he wasn’t brave enough to exempt the sector entirely. The sector is funded mostly by institutional investors, who look after pensioners’ savings up and down the country, and has the potential to make a significant difference to the volume of housing delivery in the UK. Instead, the Chancellor announced an exemption from SDLT for first-time buyers on purchases up to £300,000.

While I welcome any move to help young people get onto the housing ladder, the Chancellor has missed an opportunity to use SDLT reform strategically. This sort of change provides young people with an incentive and opportunity to buy, and so it increases demand, but does nothing to improve supply. If we give impetus to demand and fail to increase supply, prices will continue to rise.

But to come back to, and to end, on a positive note, the Budget also tackled the thorn of business rates reform. The BPF was one of the signatories to the letter to the Chancellor calling for the business rates multiplier to be calculated by reference to CPI, which is a much better indicator of commercial property rental growth than the now-discredited RPI.

Whilst short of the fundamental review which is needed, the Chancellor’s recognition of the case for a move to CPI was a clear example of what the industry can achieve when it speaks to government in a unified voice. In this case, it will give much-needed relief to struggling businesses and ultimately benefit both our industry and its customers.

Ensuring we have a strong voice is fundamental to positive change for this country and for our industry. We have so much to offer – and yet are often not recognised for the wealth-creating driver of economic growth that we represent, nor for the immense social value that long-term investment in our communities is bringing around the country. I urge our industry’s junior professionals to help shape this voice today by getting involved.

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