Here are 5 things that will happen to the property sector whoever wins the General Election, says Jon McLeod
I know readers of The Debate have had more than enough of the General Election already, so I’m not going to talk about it.
Instead, I am going to talk about five things that will happen in and around the politics of the property sector whoever wins.
The first is real change in the area of business rates.
Let’s be clear about what business rates really are. They are not a local tax. The tax rate is set centrally (for each of the four UK nations) at a uniform level. The rate is multiplied by each non-domestic property’s rateable value. Councils collect the money, send it to the Treasury, which then redistributes it on a per capita basis as part of the bundle of needs-based grant support that is provided to all local authorities.
It’s not transparent and it’s not local.
The Coalition Government has tinkered at the margins, allowing councils to keep some of the revenue from newly consented properties, providing a ‘development incentive’ that readers of this magazine are likely to regard as welcome.
All the main parties are committed to reforming business rates, largely under pressure from the retail sector, which has seen an awful hollowing out of the high street during the recession.
The Treasury is consulting on further changes with that consultation closing on 12 June.
The least we’ll see is councils allowed to keep all new business rate revenue. At the other end of the scale, with devolution/decentralisation mania ripping across the country, we will also hear serious calls for the rate to be returned entirely to local government control. Under this scenario, they are trusted to set, collect and keep business rates in their entirety.
The second certainty is a popular revolt over housing costs.
With house-building stats still spluttering, social housing set for a possible for sell-off, the private rented market as bad as it’s ever been, and home ownership beyond the reach of many in the South East and London, housing is going to get hot as an issue.
The Conservative move to let the right-to-buy genie out of the bottle for housing association tenants has refocused attention on the unavailability of affordable housing to rent.
Home ownership is undeniably popular with that part of the public who have the chance of getting on the ladder. But those left out will become increasingly vocal.
The new Coalition Government – especially if it is a ‘rainbow of the left’ – will be compelled to pump-prime house-building, loosen planning control and impose targets on recalcitrant local authorities.
The third thing we’ll see is a continued fragmentation of the United Kingdom as decentralisation takes hold.
The UK is going to become a more complex environment within which to do business, especially if that business is really property.
It will no longer be quite so clear where the power lies in the area in which you are operating. Nationally, locally, hyper-locally? In an environment where everyone from George Osborne to Nicola Sturgeon will be taking powers from Whitehall, the old political certainties will be increasingly challenged.
Fourthly, as any Government will be forced to look down the back of the sofa for loose change, the period to 2020 will see an accelerated sell-off of public assets – and we expect Parliament to force the pace on this.
Smart developers will look to partner with owners of public assets to make sure that real opportunities, that create true value for communities and for the businesses that serve them, arise from what will undoubtedly be a forced divestment.
Finally, we will surely see the timely demise of the unloved and unlovely Local Enterprise Partnerships.
A crackpot creation of that wannabe master of dog whistle politics, Eric Pickles, LEPs have proved as ineffective as they have been under-resourced.
Sadly, we will not see a returned to fully formed Regional Development Agencies.
However, we will see a renaissance of local economic regeneration initiatives, not driven by top-down diktats from crackpot Cabinet members, but genuinely the product of local and regional will to harness the strengths and assets of a particular area.
Look at the work that the Core Cities and the Key Cities networks of councils are already doing to reroute power to communities and away from Whitehall. Regeneration will happen on the ground, and it is there that the property industry needs to find its feet with the new power-wielders of the 2015-2020 Parliament.
A version of this article first appeared in Estates Gazette