The long-anticipated 2024 budget was delivered at the beginning of November, with the new Government looking to focus on investment, growing the economy, and improving public services. Much of this involves raising extra money and, as with every Government budget, redistributing the money that comes into the Treasury.
When it comes to commercial units, there are a few different ways that some of the policies could affect tenants and businesses, landlords, and the market in general. In this article, we are going to take a look at some of the policies in the budget and how they might impact the world of commercial units.
Public Services Improvement
If the extra money that is spent as a result of the budget can have a positive on public services such as the NHS and education, there will be great benefits for the commercial unit sector and businesses in general. Having a well-educated, healthy workforce is great for the productivity and growth of a business, as well as making the economy healthier.
A healthy economy will, of course, boost the country as a whole and make it more attractive to other businesses that want to open up here, perpetually improving the economy.
Investment in Housing and Infrastructure
The Government has promised high levels of investment in housing in the UK, pledging £5 billion to help ease the housing crisis, as well as reforming planning laws. Alongside the provision of new housing, this will also lead to a greater necessity for other infrastructure such as doctors’ surgeries, schools, retail units, and offices.
This is likely to help to keep the commercial unit market healthy as well as help to create vibrant, thriving communities, boosting local economies.
Business Rates
High business rates have often been cited as being one of the reasons why the high street especially has been struggling over the past few years (alongside a number of other reasons including massive out-of-town supermarkets and retail parks, and the rise of online shopping since the COVID pandemic especially).
The 2024 budget has recognised these challenges and has pledged to continue business rates relief at a rate of 40%, as well as introducing “two permanently lower tax rates for retail, hospitality and leisure properties which make up the backbone of high streets across the country” from 2026 to 2027. This is, however, down from the previous relief rate, which was 75%.
With this in mind, the new government has, however, agreed to carry out a complete business rates overhaul in an attempt to make them fairer, which should benefit small and medium-sized businesses especially. It is still not clear, however, when this will be carried out.
Businesses will also be coming up against other challenges – such as dealing with the rise in employer contributions in income tax for all but very small businesses, so, whilst the business rates relief will be positively received, business owners are likely to not feel too much difference.
Regardless, business rate relief will help businesses on the high street especially, and potentially commercial properties such as retail units and restaurants.
Planning Reform
As we mentioned above, one of the major changes that the new Government is implementing is reforming the planning laws to enable quicker and more substantial construction of housing and infrastructure.
This means that in addition to the creation of more commercial units – particularly for the implementation of essential infrastructure, it is likely to be easier for businesses to build and reform new and existing commercial units.
This also includes investment in green energy and the planning that is required to create, harvest, process, and distribute reusable energy.
Devolution
Another pledge that was made in the 2024 budget relates to devolution. More money has been allocated to local government and city mayors, with more power being handed over to them to make the investment decisions that they believe to be important to their local areas.
Of course, the impact that this has on the local commercial unit market will depend on how and why the money is spent, but the hope is that it will be used to help businesses (and consequently, commercial property) grow and thrive.
Transport
The budget also detailed investment in transport works across the country, including reinstating the first phase of HS2 as well as committing to the rail line running from the east to west of England, and the Transpennine route. They have also pledged to continue with investment zones and freeports.
With quicker and easier travel between cities, and more local – especially with public transport, businesses will be able to widen not only their recruitment areas but also their customer reach. Visitors to cities often spend on hospitality and leisure, helping to boost their economies as well.
In addition to this, enabling quick and easy movement around the country – as well as easier movement in and out of the country, delivery, and logistics should also be better for businesses – especially those that operate online and in distribution.
Final Thoughts
Since the new Government’s budget was announced, there has been a significant amount of pushback, especially from farmers and some small businesses. This does not mean, however, that it is all negative for businesses and commercial property. With greatly needed investment in public services, green energy, transport, and planning, in the long run, it should be beneficial to everyone.
If you have a commercial unit that you are looking to rent or are a business searching for a commercial unit, take a look at our website and see how we can help you here at Boxpod.