CBRE UK responds to the mini-Budget
The chancellor, Kwasi Kwarteng, has delivered his mini-budget.
Read CBRE's thoughts here:
The emergence of low-tax zones is generally positive for the UK and important to give the UK economy a much-needed boost. Whilst it might be levelling up in a new guise, the lower taxes and increase in planning flexibility should help to differentiate it. Reducing business costs in key locations is critical given the current cost pressures. However, simplifying planning regimes has greater merit in industrial development schemes and it remains to be seen whether the zones will be targeted in the areas that have the highest potential for growth.
Criteria for selecting the investment zones should focus on industry growth potential. Industries such as technology, renewables and life sciences could all have a significant economic impact and should be prioritised. For example, in our recent UK Tech Cities Report, Manchester, Birmingham, Glasgow, Reading and Edinburgh came out top as leading tech locations. The VAT cuts should provide a much-needed boost to the retail sector, particularly in London as a key tourist destination.
We were hoping to see a greater focus on initiatives to support the delivery of net zero emissions. Removing “green levies” will help households, but relaxing environmental protections could be a backwards step in terms of the UK’s green ambitions. We hope that robust net zero strategies, incorporating environmental protection, remain a priority for housebuilders.
While we welcome initiatives to help first-time buyers enter the housing market, we are mindful that boosting demand without addressing the underlying supply issue will lead to price increases and it could have a more detrimental than positive effect. There is no doubt that the previous stamp duty holiday was key in stimulating housing demand, but the effect wasn’t consistent across all price bands, and it had a knock-on effect on house prices.