The 'chief executive of First Property Group' in yesterday's City AM presents the usual Homey shopping list:
If I were chancellor, I would aim to make Britain a more attractive place to invest than the EU. That must be basic common sense. So here are some ideas for Philip Hammond.
First, roll back the punitive levels of stamp duty ratcheted up by successive chancellors, particularly George Osborne. Stamp duty means fewer transactions and higher property prices. What we need is a vibrant housing market with smooth transactions.
This applies equally to commercial property. Stamp duty of five per cent is vast considering the yield available on commercial property. In central London, yields are as low as three per cent per annum, requiring a hold period of nearly two years just to recover the cost of stamp duty.
Second, lower business rates across the board to lessen occupational costs for businesses. Business rates have been far too high for too long. In particular, we need to eliminate business rates on vacant buildings – it is wrong to tax a landlord on a building which yields no income.
Third, reverse the chancellor’s short-sighted decision to abolish capital gains tax relief for foreign investors. Our market relies on foreign investment, so why attack the geese that bring their golden eggs to Britain?
Fourth, once out of the EU, abolish the requirement to adhere to Solvency II. Under Solvency II, insurance companies do not need a capital buffer for investing in Greek government bonds, for example, but must hold one of at least 25 per cent when investing in property. This is misconceived regulation, and we would be better off without it.
Our banks must be enabled to lend without the hindrance of punitive regulations. In Poland, you can raise cheaper debt on better terms for commercial property investments when compared to the UK. That makes no sense given the comparative sizes of our respective economies and markets.
Debate Magazine
