Get Off Our Case, CRE Warns Treasury

Senior property figures have slammed Treasury policies and attitudes to U.K. real estate. 

Remarks at Bisnow London's Big Office Bash indicate mounting frustration with the government’s fiscal approach to property. CRE critics say policy missteps include interventions in London's luxury housing market, and mixed messages on private rent sector residential development.

“The government likes taxing real estate, but additional taxes on property are very dangerous,” Helical Bar Chief Executive Gerald Kaye warned. “It will kill it, potentially.” 

He said too much taxation can stop development. The top end tax is already slowing down the residential market.

The problem is that government treats property as a cash cow, said Realla founder Andrew Miles, who moderated the Bisnow discussion 27 September at the Royal Institution.

RSM head of real estate and construction Howard Freedman said, “I think real estate clients feel like they have been under attack from the Treasury for the last couple of years, beginning with the rule changes for overseas investors in residential property.”

Freedman said further Treasury-inspired changes were still bedding in. “I don’t think anyone understands what the full impact of that will be. Overall I don’t think the government is helping make this a positive place, but it hasn’t put a dampener on the market.”

The criticism comes as the governing Conservative Party assembles this week in Manchester for its annual conference — and just weeks ahead of Chancellor Philip Hammond’s 22 November budget.

The Bisnow audience also heard criticism for Labour opposition leader Jeremy Corbyn — whose party conference was last week — and hints of a disagreement over Brexit.

“Corbyn is rather scary but London is still a pretty safe haven,” Derwent London CEO John Burns said. “Since Brexit we’ve lost no deals, although you can’t go pushing occupiers, and incentives have come out by a couple of months. Maybe the market is having a holiday until Brexit begins, but a year ago we had 12 enquiries for 100K SF or more in our areas, and today they have been replaced by 12 more.”

Kaye agreed London is still appealing globally.

“Let’s not have any negativity about Brexit,” he said. “We talk to investors from the Far East who have been to Paris. They find the market there completely impenetrable, and completely opaque — which is why they like being in London.”

Workspace head of corporate development James Friedenthal also had not noticed any serious disturbance in the office market, despite political headwinds.

“There’s huge amount of nervousness but we’re seeing zero change to our portfolio as a result, enquiries have been strong and people still have a will to grow their business,” he said.