Business rates, the Community Infrastructure Levy and Build-to-Rent housing have been identified as priorities for the next government, no matter who it is.
Business rates, the Community Infrastructure Levy and Build-to-Rent housing have been identified as priorities for the next government, no matter who it is.
Business rates
British Property Federation Director of Policy Ian Fletcher says that while businesses across the spectrum have traditionally cited regulations, finance and access to skills as the key issues requiring government attention, business rates have risen up the agenda.
He claims they are now broadly seen as the most harmful factor affecting UK business activity.
Due to the Retail Price Index accumulator, business rates are representing an ever-higher proportion of business expenditure, says Fletcher, which in turn constrains rents and ultimately makes investment in UK real estate less attractive.
Marcus Dorfman, associate in business rates at Strutt & Parker added: “It is certainly welcome news to see the double small business rates relief will remain for another year. More welcome is the Government’s recognition that the system is outdated and that it is committed to reviewing the 400 year old taxation method.
"It is unfortunate that this will not be reported until the 2016 Budget but it is nonetheless encouraging that they intend to deal with the flawed system. The planned 2017 Rates Revaluation will likely see considerable increases in the rates bills of Central London occupiers, and the sooner this is addressed the better.”
Community Infrastructure Levy
His other area of focus for the new government was the Community Infrastructure Levy (CIL).
In areas where CIL is in force, land owners and developers must pay the levy to the local council based on the size and type of the new development. The money raised can then be used to fund infrastructure that the council, community and neighbourhoods want.
However, Fletcher said that the levy remains a difficult and central obstacle in the planning process. While calls for its abolition have largely subsided, there is still significant room, and need, for the tax to be improved, he says.
He also welcomed that the opposition parties didn’t seem likely to promote significant planning reform in the next government.
The National Planning Policy Framework took much time and consultation to create, he says, and the property industry can be cheered that it will now be given time to bed in.
Build–to-Rent
Finally, he welcomed the Build-To-Rent programme.
While potential policies such as the mansion tax and three-year tenancies still pose challenges, the cross-party consensus accepting the need to encourage institutional investment into Build-to-Rent housing is laudable, says Fletcher.
The government is planning to invest £1 billion in a Build-To-Rent fund, which will provide equity finance for purpose-built private rented housing, alongside a £10 billion debt guarantee scheme to support the provision of these new homes and up to 30,000 additional affordable homes.