Billions of reasons why government should care about property

This will be my last article as president of the British Property Federation before my term ends in July. It has been an interesting 10 months, writes David Sleath. Having been “in post” during the immediate aftermath of last summer’s EU referendum, I have been encouraged by the progress made by the BPF and its members to ensure our industry’s voice is heard as the politicians develop their policies ahead of Brexit. We have much more to do, but the engagement with government on a range of topics from the Housing White Paper to the industrial strategy are sources of encouragement. Like many people, I can’t say I am enthusiastic about another General Election at this time. The period of “purdah” which precedes any election, during which ministers will not make any major policy announcements, combined with the inevitable reshuffle of ministerial responsibilities which follows, risks slowing the momentum gained of late. And all bets are off if there is a change of government. So it is more important than ever that our industry keeps making its case and repeating its key messages to politicians and officials. Brexit will undoubtedly remain the dominant political issue of the campaign. And it remains a key worry for many in our industry. The BPF’s manifesto for the General Election is our Brexit manifesto. And it has two elements – firstly, making the case for why the government should care about the property industry and, secondly, setting out our key “asks” of government to help ensure we keep delivering what the country needs. Why should government care about the property industry? Because we contribute almost £100bn to the economy each year and employ more than 2m people. We provide essential “infrastructure” in the form of offices, shops, industrial buildings and housing. And we attract both domestic and foreign capital which is essential to drive growth, regeneration and productivity across the country. Finally, with a total value of £1.6tn, the wealth of the nation is inextricably linked to the value of commercial and residential real estate, with pensioners and savers reliant on the returns from property. Our key ask is for government to partner with the sector on five key themes: ■ First, it is about creating the right environment for businesses generally (our occupiers) to flourish and for investors (including real estate investors) to have the confidence to put their capital to work in an increasingly uncertain world. Staying “open for business” and ensuring the UK remains a magnet for talent as well as capital are essential for our customers and therefore for real estate. ■ Secondly we need government to provide a stable and competitive UK tax, regulatory and planning system. Investors hate surprises and will risk adjust their return requirements if the government develops a reputation for inconsistency and for fiscal surprises. We’ve seen this in the recent past with George Osborne’s stamp duty changes. Despite reforms, the planning system remains overly complicated and is not adequately focused on delivery. Resourcing levels of many local authorities has continued to decline, hurting their ability to drive much needed development. New solutions are needed to reverse this trend. Given a free hand, many of us in property would also love to see the overly burdensome process of procuring land from the public sector (OJEU) completely overhauled. ■ Third, the government has a vital role to play in encouraging, funding and enabling infrastructure investment which will unlock land and stimulate investment. It’s already made a significant commitment to support regeneration of our great towns and cities and to support productivity across the country, but we’ll need more. Having the courage to press on with airport expansion, rail projects and investments in digital infrastructure will undoubtedly pay dividends. ■ Fourth, we need the government to help ensure our industry has access to the skills needed for construction and development. I’ve already mentioned the importance of talent for our customers’ businesses but we have a very real issue in our own sector and Brexit threatens to make that worse. It is essential that our industry is able to access skilled construction workers from overseas, whilst continuing to develop more home-grown talent. ■ Finally, we want the government to support an increase in housing supply across all tenures to help solve the housing shortage. The recent Housing White Paper explicitly addresses this issue and is a welcome development. But the “devil” is in the detail. Our industry has up to £50bn ready to invest in high quality, professionally managed rental homes, so the capital is there if the government develops the right policies. We are at a critical juncture for the country and for our industry. In my last column as president of the BPF, my plea to members and to EG readers alike is to keep pressing our politicians to ensure our case his heard. David Sleath is chief executive of SEGRO and president of the British Property Federation