With many property experts predicting prices in the South East will fall during the next six months, and industry concerns over the implications of Brexit, the team at audit, tax and advisory firm Crowe Clark Whitehill has called for cuts to Stamp Duty Land Tax (SDLT) to stimulate supply and transactions.
Crowe’s annual Property & Construction Outlook Survey found that 43% of respondents expected the value of South East commercial property to fall over the next six months, with 25% predicting no changes and the remainder expecting varying rates of increase.
Simon Crookston, partner at Crowe, which has offices in Maidstone and Tunbridge Wells, said:
“More than half of respondents (54%) believed the biggest barrier to business growth was the SDLT regime, with a further 12% perceiving it to be Capital Gains Tax. We would urge the government to look at overhauling these tax regimes in order to fuel growth and investment.”
On a positive note the survey found that more than half (51%) expected their businesses to grow, with only 22% expecting them to decline, and the remaining 27% predicting no change in size.
Not surprisingly, the survey undertaken by Crowe’s Property and Construction team found the South East was second only to London when respondents were asked which part of the UK they believed offered the best outlook for investment in property over the next 12 months.
However, Brexit has cast a shadow of uncertainty over the future health of the sector.
The survey found that 48% believed the EU Referendum’s result was not favourable to the UK property and construction market, with a further 42% not sure, and only 10% feeling it would be positive.
Simon Crookston added: “It is clear there are a combination of factors currently holding back investment, notably the uncertainty over Brexit, but also the current tax system.
“We have heard from some in the industry that a number of projects in the South East have been put on hold until the dust settles. With the pound having weakened there has been an immediate impact on the cost of materials, which is further contributing to a slowdown. There is now the need for the Government to act quickly and reassure the industry.”
When asked about the outlook for the industry, the performance of the UK economy was identified by 42% of respondents as the largest factor for concern for the year ahead. Access to finance was identified as the biggest barrier by a further 17%, 13% cited the plight of the global economy, with 12% believing the planning regime was the most critical issue.
Crowe recently exhibited at the Kent Construction Expo and asked visitors to its stand: ‘Has Brexit impacted your growth ambitions?’. Of the 56 people who answered, 55% said no, with the remaining 45% saying yes.
Simon Crookston, said: “For many businesses it will be too early to gauge the true level of Brexit’s impact. What is certain is that every business needs to regularly review its budgets and operations, watch its competitors carefully and keep a close eye on its financial performance.”
Crowe provides audit, tax and advisory services for many industries, including the property and construction sector. For more information call 01622 767676.