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We entered 2022 with an air of uncertainty which has continued to persist. There's hope that clarity will come, and come soon, or at least soon after the long list of urgent issues facing the PM. The main concern seems though that the proposal to reverse recent NI increases and corporation tax is likely to have a direct impact on commercial real estate. Many property commentators are expecting the financial markets to be very reactive to this and whilst there may be an increase in investment from overseas investors (as sterling falls), there's likely to be a significant increase in the cost of borrowing.
As recently reported by Knight Frank, the super-deduction (giving relief at 130% of the qualifying cost compared to the usual 18%) has benefitted and incentivised companies expanding their logistics infrastructure in the UK. This is due to come to an end in March 2023, and it's unlikely that any further relief will be as generous. There's been a huge up-tick in the development of UK-based warehouses, supply chains and logistics so let's hope this isn't undermined.
Many believe that Conservative governments like creating homeowners because they are more likely to vote Tory! If this is true, it's likely Truss' focus will be on first-time buyers and managing the overall economy so the affordability problems people face are overcome. Let's watch this space...
Article by Jo Wright