Property has unveiled its Brexit demands for government, with three manifestos launched this week from the British Property Federation, the Property Industry Alliance and the City and Westminster Property Associations.
But with government pulled in so many different directions, will the property industry’s demands be at the forefront of its agenda?
“Recognising that the government has got a lot on its plate, and getting its attention on some of the things we’d like to talk about is probably going to be quite challenging, so we’re just trying to boil it down to five really key asks,” says David Sleath, BPF president and chief executive of SEGRO.
The BPF will be leading the industry’s Brexit pitch over the next two years through its regular meetings with senior ministers. So it needs to make a clear case about how property contributes to the wider economy.
“We are a huge economic driver and employer,” says Rob Noel, chief executive of Land Securities. “If I take my business, over the past five years we have spent £3bn speculatively in developing 3m sq ft of offices in London and two shopping centres – one in Leeds and one in Oxford. That would have employed tens of thousands of people in the supply chain, and we are now not starting speculative development, because our customer, the UK retailer, the international retailer… does not know what its trading environment is within the UK.”
The stakes are high. Property contributes £94bn annually to the UK economy – 5.4% of GDP, according to the BPF.
High on the agenda is ensuring there are no sudden tax changes, which will cause greater uncertainty and scare off investors.
Hammerson chief executive David Atkins says: “If the government is really committed to infrastructure in its wider state, real estate included, then it’d be putting tax breaks in our sector, not increasing stamp duty, which is what it has done.”
And it is not all about London. “I think it is important for government to recognise the fact that we can play a key part in the success of the UK, be it GDP growth, productivity growth, employment or better productivity from non-London parts of the UK,” says Legal & General Investment Management head of real assets Bill Hughes.
Should the manifesto be more detailed? BPF chief executive Melanie Leech says it is not about how the government delivers on the industry’s concerns; it is ensuring that it delivers.
“The points of principle that are important to us, around business confidence, around access to talent, we’ve articulated. What we’ve not tried
to spend much time doing is thinking about how government is going to deliver those things for us… because frankly, we’d have a limited ability to influence that.”
For now, greater certainty is the industry’s priority. The Supreme Court’s decision this week – ruling government must seek parliamentary approval to trigger Article 50, which prime minister Theresa May had hoped to do by the end of March – could delay the process.
“The timeframe’s the killer,” says LandSec’s Noel. “We’ll look back on this in 20 years’ time and this will have been a blip. But rather it be a short blip than a long blip.”
EU builders – how can we keep them?
Government is considering introducing a Tier 3 visa category for lower skilled, lower wage workers in response to anticipated labour shortages post-Brexit, increased cost of construction and a potential slowdown of development.
Speaking to an industry audience on Tuesday at the CWPA Brexit manifesto launch, Conservative MP for Peterborough Stewart Jackson, a member of the Department for Exiting the European Union, said: “It may be that’s one of the options, but it’s still work in progress at the present time.”
He added: “I would make a plea that it’s important that business and commerce tells us the numbers they need, the impact those people are making, and what they want the future to look like in terms of immigration.”
Earlier this week, Crest Nicholson chief executive Stephen Stone urged government to treat EU builders as “skilled workers”. Around 70% of the FTSE 250 housebuilder’s workforce in London comes from Eastern Europe.
Property’s Brexit manifestos
British Property Federation
- Maintain business confidence
- Provide stability for the tax and planning systems
- Encourage infrastructure investment
- Retain access to construction skills
- Support housing supply across all tenures
City and Westminster Property Associations
- Set up UK cities network to promote collaboration in the property sector
- Put London at the heart of the Brexit negotiations
- Invest in world-class infrastructure and create a healthy environment
- Provide the homes that London needs and the modern workspaces for its businesses
- Provide the skills needed to build London and to attract and grow businesses
Property Industry Alliance
- Maintain overseas investment into UK property
- Address the industry’s skills shortage in the construction, investment and asset management sectors
- Reform public procurement rules to speed up development
- Create a simplified and fairer tax regime for the property and infrastructure sectors
- Revamp the complex environmental sustainability regulatory framework
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