Autumn Statement - doom and gloom for the UK property industry?

Guest blogger James Nadin provides an overview of the Autumn Statement for the UK property industry.

So if you believe the headlines, the Chancellor's statement on Tuesday pretty much confirm that we're all doomed, particularly if the Euro-zone crisis isn't resolved. But are there any crumbs of comfort the property and construction industries can take from the measures outlined in what amounts to an autumn mini-budget?

The housing sector seems to have the most to be (cautiously) optimistic about. House-builders should be cheered by the £400m scheme to kick-start stalled housing projects, and the Government-backed mortgage indemnity scheme for those house buyers who can only raise a 5% deposit. There is also the promise of funding for more social housing projects, using the proceeds of selling existing stock to occupiers at up to a 50% discount.

Of course the success of these schemes will still rely on mortgage finance being made available to those who wish to buy a home. Unfortunately the overall cost of buying will not be helped by the news that the stamp duty holiday for first time buyers of homes worth up to £250,000 will end next March.

Developers will welcome the Government's stated commitment to push on with its reforms to the planning system and to address the EU's rules on 'Habitats' (perhaps not such good news if you're a great-crested newt or a dormouse). Concerns remain that the proposed reforms to planning, in tandem with the recently enacted Localism Bill, may actually result in Developers facing more obstacles and delays than they did previously - but only time will tell.

There's not much good news for retailers. The Treasury has pretty much ignored pleas to lessen or negate the impact of the proposed increase in business rates next year. The OBR's projected growth figures for the retail sector over the next 2-3 years are dismal. Sadly, it seems we're destined to see a number of retailers go to the wall in the New Year.

And what of the much trumpeted involvement of some of the UK's biggest insurers and pension funds in the new £40bn National Infrastructure Plan? On paper this looks like encouraging news for constructions firms, but the commitment of private sector money looks far from finalised. It seems there is actually no binding agreement in place between the Government and the aforementioned insurers and funds, merely a 'memorandum of understanding'.

All in all, a bit of a mixed bag for the industry. There will undoubtedly be a number of regulatory issues and disputes to resolve as the Government's plans begin to be implemented, which will keep us lawyers happy. However, as all who work in the industry know, commercial lending, or the lack of it, remains the biggest single impediment to growth in the property sector. And I suspect the increase in the banking levy is unlikely to help persuade the banks they should be more generous with their lending criteria....

James Nadin is a partner in the Commercial Property Division at Penningtons Solicitors LLP

Photo by MR Photography. via Flickr.