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A Budget fit for the future of real estate?


Delivering a slick speech on the Budget last Monday, the Chancellor stated that “the hard work of the British people is paying off” and that “austerity is coming to an end.” But is it indeed? This year’s budget was advertised as one ensuring that Britain is ‘fit for the future’. The real estate industry in particular has been calling for reforms on business rates, which have been accused of hobbling traditional ‘bricks-and-mortar’ retailers. Despite the announcement of two key measures to help the industry face the headwinds, there remains an element of doubt as to whether it will make a difference and help drive the country’s retail economic powerhouse.

 

Chancellor Philip Hammond has made his plans to spend £1.5 billion on the UK’s high streets an exercice de style. The new package is aimed at helping small high street retailers. It includes a business rates discount for shops with a rateable value of less than £51,000 and the creation of a £675 million “future high streets fund” that councils could use to redevelop their high streets. Since that announcement, several industry players and experts have questioned how much difference the rates measures will make – as almost half of the premises highlighted by the Treasury already qualify for small business rates relief – or sought clarity about how much of the new fund will actually be allocated to small towns.

 

It is all good sport, but there is an elephant in the room. The truth is that despite a meaningful statement of support, no announcement to help larger retailers has been made. Larger retailers employ the most people, occupy the most property and feature most frequently in people’s retirement pots. It is only fair to think that helping larger retailers could be a win-win, as well as a critical action to implement in pre-Brexit Britain.

 

This felt like a ‘solid’ Budget, designed not to rock the boat; as things stand, the Chancellor has made it clear that a no-deal departure would mean a whole new Budget in the spring, so we can only wait and see just how turbulent those waters will be.

 

Noemie Mourot, Account Director, Innesco

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