Commenting on the Budget, Sukhdeep Dhillon, senior economist at BNP Paribas Real Estate, said:
“The Chancellor stated that this Budget was about much more than Brexit, but downgrades to UK’s economic forecasts clearly outlined the challenge the Government is facing as it set out measures to boost growth in preparation for the UK’s exit from the European Union.
“The Office for Budget Responsibility’s predictions, presented by the Chancellor, forecast the UK economy to grow by 1.5% this year and 1.4% next, falling further to 1.3% in 2019. A gradual pick up of 1.5% and 1.6% is only expected in 2021 and 2022 respectively.
“The Chancellor had the opportunity to be more radical with fiscal policy. Investment by the private sector remains weak and, as outlined by the latest forecasts, is likely to be even weaker in the years ahead. While a balanced budget should remain the appropriate long-term strategy, given our experience of optimistic forecasts and unexpected shocks, allowing the date for achieving a surplus slip another year or two would have been reasonable.”
Emily Francis, National Head of Rating at BNP Paribas Real Estate, added:
“This is the most significant budget for business rates since the 1980s, and ratepayers will be relieved that their long-standing calls for reform were answered today.
“A complete surprise concerned retrospective legislation to address the so-called ‘staircase tax’, brought about by the Supreme Court judgement in ‘Mazars’ in 2015.
“The proposal means that many businesses who occupy adjoining floors in multi storey office blocks, which the judgement directed should be split into separate ‘properties’ for rating purposes, may now be merged back in to a single rates bill, allowing tenants once more to benefit from economies of scale and thus a lower rates bill.
“Switching the annual increase in rates bills from RPI to CPI from 1 April 2018 will save £2.3bn over five years. This was expected to be confirmed in 2020 so bringing this forward will be extremely welcome to ratepayers.
“Three-yearly property revaluations, instead of the current five-yearly pattern, will prevent large swings in premises’ rateable values that in turn will make businesses’ liability more predictable and is also a welcome move.”