The 2016 budget created a flare-up in government, but was there a stir in the property sector? Contrary to some rumours, there was no U-turn on stamp duty for purchasers of buy-to-let or second homes, and thus the 3% surcharge looks like it is here to stay.
One announcement that brought a smile to smaller investors was the announcement of new rates for commercial stamp duty land tax (SDLT).
George Osborne made his statement, saying that there would be 'big tax cuts for small firms'.
Charlotte Bland, Associate Director, Commercial Management and Investment said: 'The announced changes came into effect on property purchases completed on or after 17th March 2016 and it is true that this measure favours small investors, individuals, personal pension schemes and small / medium size property companies.
"Less SDLT will be due than before as long as the price of the property in question is below £1.05m.
"Prior to the announcement, on a commercial property purchase of £300,000, the stamp duty would have amounted to £9,000. Now it will be £4,500 – a real reduction of 50%.
"As with residential SDLT there is a rising scale of duty applied depending upon the purchase price which will now be applicable on "slices" of the value. On commercial property below £150,000 no stamp duty will be payable; on the next £100,000 of the purchase price the rate will be 2%; and a top rate of 5% will be due on any amount over £250,000"
This may attract more, smaller investors to the commercial property market, especially in light of the additional duty that residential buy-to-let investors will incur, coupled with the impending withdrawal of tax relief on mortgage interest rates.
Charlotte continued, "While commercial investments may be subject to more risk than residential property, on the plus side, relative returns are higher."
Also, the changes will now mean that an investor will achieve a higher return on any commercial investment purchased below £1.05m due to the reduced stamp duty they will now pay. The downside is that this change may lead to an increase in the value of properties for sale, as the market naturally re-adjusts and any saving on costs will be negated by increases prices.
Another downside of this change to SDLT is that purchases over £1m will be adversely affected and property price will be a deciding factor when calculating net returns. Larger investors – such as Pension Funds – will be disadvantaged with the stamp duty on a £10m property purchase increasing from £400,000 to £489,500.
However, the Chancellor assured his audience that only '9% of buyers would pay more than before, while the tax bills of 90% of purchasers would be cut or stay the same.'
For the fifth time in six years, Caxtons is delighted to have won the coveted property industry award 'EGi Deals Winner Kent' in 2016.
This award is based on the number of completed commercial property sales and lettings achieved in the preceding twelve-month period.
James Roberts, Caxtons' commercial agency manager in Canterbury said, "Once again, this strengthens our position in the commercial property market place and demonstrates that we consistently outperform our competitors.
"While property in general has produced improving returns in recent years, the commercial market proved to be less attractive as an investment. The lack of certain types of property has been difficult, and speculative development is still viewed as a risk. However, of late, commercial property has regained the ground it lost during the recession and prices have reached their peak of 2008."This improvement in the commercial market may reflect changes to stamp duty and the withdrawal of tax relief on mortgage interest rates due to impact the residential buy to let market."
Against all the odds, Caxtons improved on the high level of activity it was able to achieve in 2015, and the Caxtons'
Estates Gazette is the well respected, leading national property publication and its EGi website attracts more people seeking business premises than any of its competitors.
Statistics released by the British Retail Consortium and Springboard show improved footfall for retailers during January 2016, with a 1.2% increase on 2015 figures.
After a dreary December, which reflected a 2.2% fall in numbers on the previous year, this has brought hope to landlords and retailers who had been feeling the effect.
"The increase in footfall across all retail destination types, the first since December 2011, alongside the rise in spending in January, finally demonstrates what is well known - that bricks and mortar shopping environments are still important to consumers", said Diane Wehrle, marketing and insights director at Springboard.
And Caxtons' Commercial Agency office in Canterbury can confirm that new and independent retailers are once again opening up on 'the high street'.
With competition such as St James, a new retail development in Dover, attracting major high street brands such as Marks & Spencer, Next, Travelodge, Bella Italia, Nandos and Cineworld, it could leave traditional busy shopping and leisure areas neglected.
However, the good news is that this means vacant shop premises are available for independent traders to occupy, something they could not have envisaged when in
As a consequence, in the past two months Caxtons has agreed the letting of two Dover shops on new leases with a further two premises under offer.
Beverley Smallman from commercial agency said, "This is very positive news for a sector that has valiantly been fighting the effects of internet shopping, depleted numbers of customers and market share. It has seemed a desperate battle for the smaller independent traders, but now they are coming back to high street locations all over Kent and adding variety and interest to the shopping experience.
"At Caxtons we are getting many more enquiries from retailers wanting and needing a physical outlet, rather than the anonymity of a web based store. Of course, this does not preclude them from having and maintaining both platforms, and many of our tenants do. But it is really nice to see positive activity back on the high street once again."
For further information about commercial property stock contact Caxtons' commercial agency offices in Canterbury on 01227 788088, Maidstone on 01622 234886 and Crossways on 01474 567666.