British Chancellor of the Exchequer Philip Hammond delivered the annual autumn statement late last month and underlined the UK’s numerous economic weaknesses that the Brexit vote only enunciated. As Brexit negotiations continue between now and 2019, Britain will have to tackle its poor productivity record, particularly the prosperity gap between London and other international cities. In order to tackle the challenging economic problems, the Chancellor announced to Parliament a number of key initiatives, including efforts to bring down the deficit, raise household annual income, and cut corporate taxes.
Property Partner, a London-based real estate crowdfunding platform, noted that of all of the initiatives, the government’s efforts to invest in infrastructure and innovation as a route to achieve long-term productivity is something to get excited about in the Brexit environment. After all, “People typically do not ‘panic sell’ their homes.” According to Property Partner:
“For the housing market, and for new technology firms, the announcements in Philip Hammond’s Autumn Statement are resoundingly positive. A clear focus on increasing productivity through investment in housing, infrastructure, and disruptive technologies shows that the government has recognised the greatest growth opportunities for our economy.”
Founder and CEO of Property Partner Daniel Gandesha pointed out three key areas of the autumn statement that will positively affect the housing market, tech companies, and SMEs in general: spending on housing will double, the country refocusing on infrastructure and innovation, and restructuring tenants-agents laws and fees.
As the Government of the UK outlined, its investments in infrastructure and innovation include:
- A new National Productivity Investment Fund to provide £23 billion of additional spending, particularly in the transportation, digital communications, research and development (specifically in robotics, artificial intelligence, and industrial biotechnology), and housing sectors;
- £2.3 billion for a new Housing Infrastructure Fund, particularly to start roads and water connection projects that contribute to the construction of 100,000 new homes, to provide 40,000 new affordable homes, and to construct new homes on public sector land;
- £390 million investment in future transport technology, including driverless cars, renewable fuels, and energy-efficient transportation; and
- £1 billion to invest in full-fibre broadband and trialing 5G networks, working to roll them out by 2020-2021.
Of all of the initiatives, Gandesha pointed out that:
“Perhaps the most significant announcement from the statement was the introduction of a new National Productivity Investment Fund of £23bn aimed at “infrastructure and innovation”.
“The planned investment in infrastructure will unlock growth in many new areas of the country and will help reduce regional inequality. The Chancellor announced additional plans to support growth in key regional areas such as the ‘Northern Powerhouse’ and ‘Midlands Engine’, as well as London and the South East. Property Partner recognises the opportunities presented by the North and Midlands, and has already made an active effort to increase our exposure in these areas, while continuing to pursue opportunities in London and the South East. This has given our investors the ability to achieve a regionally balanced portfolio.”
In the face of all of the economic setbacks that could occur as Brexit negotiations continue over the next three years, the investments in housing and innovation that Chancellor Hammond announced will serve as the north star for the country’s divorce from the EU.
“We welcome the government’s decision to address some of the greatest challenges faced by our economy today, and to embrace some of the greatest opportunities. Their support for housing and innovation is well placed, and we look to the future with confidence,” said Gandesha.