Chancellor George Osborne has put property and retailers at the heart of today’s Autumn Statement.
In a bid to boost trade on the high street Osborne has capped businesses rate increases at 2% next year in England and Wales, rather than link them to inflation. He also handed a £1,000 discount to smaller shops and pubs for the next two years and halved rates for businesses taking leases on vacant properties.
The move follows news on Tuesday that the 3.2% rise in retail spend last month was driven by online businesses.
Liz Pearce, the British Property Federation’s chief executive officer (CEO), welcomed the move saying that business rates are a barrier to investment in the built environment. She says: 'Action to support the re-use of empty shops is particularly welcome.
‘Empty properties blight our high streets and town centres, and we would urge government to think further about reforms to the business rates regime that would allow property owners to invest further in these properties.”
Tackling the housing shortage was on the Chancellor’s mind, especially in London where agency Barnard Marcus reported last week (25 Nov) that 14 potential buyers were chasing each property in the capital with a for sale sign outside.
Foreigners account for 28% of central London property deals and from April 2015 when selling those residential properties they will no longer be exempt from capital gains tax.
Liam Bailey, Knight Frank Global Research’s head, believes any effect on demand and pricing will be marginal. ‘Tax is not the primary driver for the majority of international buyers of residential property in London,’ he says.
It is not just existing properties Osborne has plans for. He has also approved £1 billion of loans to boost housing developments in areas, including Manchester and Leeds.
For those wishing to trade shares in property or high street-focused businesses following the news, the Chancellor has abolished the 0.5% stamp duty on buying shares in exchange traded products from April. This is to encourage firms to base their products in the UK and follows a similar move on those trading Aim shares earlier this year.
The expected raise in the state retirement age to 69 in the next 25 years highlights the need for many to take responsibility for their funding their retirement.
Chris Masley, pensions expert at Duncan Lawrie Private Bank, says younger people will have to work longer and harder for a state pension that is still falling in real terms.
‘If people do not expect to retire until their seventies, then it becomes all too easy to not make retirement planning a priority,’ he says. ‘In fact, the better mind set would be to start planning for retirement earlier, continue a strong commitment to it and maybe then people could aspire to finishing work at an appropriate age, or maybe even early.’
The statement, which updates the government’s economic plans, included news that a further sale of shares in higher street lender Lloyds Banking (LLOY) could also on the cards. UK Financial Investments, which manages the government’s stakes in the bailed-out banks, is looking at way to involve retail investors in the offer for its remaining 32.7% stake in the bank.