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Budget, Bugs and Business Rates – A Welsh Property Perspective

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Richard Murphy. Head of Cushman & Wakefield’s Cardiff Office responds to the Chancellor, Rishi Sunak’s 2020 Budget and what it means for Wales:

“It is hard at this time to look beyond the short-term COVID-19 issues. In that regard, the Chancellor’s “budget within a budget”, contained some positive reassurance to many of our clients running small businesses in Wales, which form the life blood of our economy. This. coupled with some clarity on sick pay measures is helpful, coming off the back of the recent Bank of England announcements, will provide some immediate reassurance. However, the unknown remains in relation to the severity of the impact and just how short is “short-term”. Turning to the core budget, the devil will be in the detail in terms of the true benefit to Wales but the mood music is positive:

  • £360 million additional funding to the Welsh Government
  • £27 billion for UK Roads and Motorways (including the pothole fund which will be welcomed in Wales)
  • £5 billion pledged to enhance broadband coverage across the UK

For the property sector in Wales:

  • 100% rates relief for qualifying small businesses, should help the private operator retail and leisure sector. However, the fundamental review and reform promised in the Autumn is now desperately needed
  • £12 billion of funding to deliver affordable homes – will be welcomed by both Local Authorities and the Housing Association sector
  • £1 billion Building Safety Fund to help unlock the current ‘who pays’ paralysis in dealing with unsafe cladding
  • £5.2 billion in Flood Defence funding will be welcomed if it flows through to the badly hit areas of Wales
  • The 2% Stamp Duty Surcharge for non-UK residents is unlikely to have a deep impact in Wales

In summary, a Conservative Budget that proposes to increase borrowing, provided it delivers medium-term structural benefits in the public realm, is likely to prove positive for the property sector in Wales. Welsh Government’s response will be of interest, particularly in relation to Roads and Motorways, given last years’ abandonment of the M4 relief road announcement and in any clarification provided on its own stance in regard to Business Rates Reform.”