Puma Property Finance comments on announcements made in today’s mini-budget impacting the property development industry

Paul Frost, Managing Director of Puma Property Finance, comments on announcements made in today’s mini-budget impacting the property development industry.

“Today’s mini-budget was about the new government making its mark and setting out its agenda to reboot the economy and ease the cost-of-living crisis. On the face of it, we’re encouraged by its commitment to enterprise and innovation, and we saw a clear focus on reducing regulation and promoting tax cuts in a bid to achieve growth.

“Reductions to stamp duty will clearly prove popular for those looking to buy houses, and as recent experience has shown, may help shore up waning confidence in the residential market.  Similarly, the government has set out some measures to tackle the more intractable problem of increasing supply of housing, as well as focussing on encouraging demand.  Steps such as unpicking planning restrictions and disposing of surplus government land that can be used to build homes will aid this.  As well as navigating the UK’s much maligned planning process, housebuilders and commercial property developers are also facing the triple pressures of rising borrowing costs, rising costs of materials and significant labour shortages in the construction industry.  Hopefully today’s announcements around getting more people in to work, coupled with the government’s renewed commitment to the Bank of England’s policies to combat inflation, will be the first steps along the road to tackling these challenges.

“The new local investment zones that were given the go-ahead today offer some encouragement in this regard, and mention of liberalising the planning process in these areas was certainly welcome.  However, as often with the planning system, the devil will be in the detail and that remains to be set out.  We hope sufficient thought will be given as to how this initiative will create the conditions for meaningful investment right across the UK, and not prove to be a case of picking winners at the expense of other regions.

“Finally, we hope that in the immediate drive for growth, the sustainability agenda and the path to net zero remains a high priority.  Economic growth and sustainable development should not be viewed as being in conflict with one other, indeed quite the contrary.  If the Prime Minister aspires for the UK to be energy self-sufficient in the future, achieving that will involve controlling the demand for energy – to which improving the sustainably and efficiency of our housing and commercial property stock is a critical part – just as much as it will require tackling the sources of UK energy production.”

Kindly shared by Puma Property Finance

Main photo courtesy of Pixabay