News release

Economic update: real estate and construction reaction

Kersten Muller, Head of Real Estate and Construction at Grant Thornton UK LLP, commented:

“Today’s Summer Statement from the Chancellor was a sort of mini-Budget very much focussed on kick-starting the economy after the enforced hiatus.  A number of targeted measures were introduced, in particular for the real estate and construction sector.  Some measures were as expected whilst others were far wider.

“Of particular note is the emphasis on boosting the recovery of the housing market, which is so intrinsically linked to the British public’s perception of economic prosperity, that any stimulus will have a knock on benefit for the whole UK economy. The temporary cut to stamp duty land tax on residential home purchases up to £500,000 seems to be applicable to both home owners and those buying second homes and investment properties, although the latter will still have to pay the 3% surcharge.

“The importance of the construction industry has also been recognised through accelerated infrastructure expenditure and the “Green Homes” fund. Both of these should encourage the creation and retention of jobs.

“The cut in the rate of VAT from 20% to 5% in the hospitality sector will be welcomed by businesses. Our understanding at present is that this impacts businesses supplying the public rather than landlords providing accommodation. Nevertheless this, along with the ‘eat out to pay out’ incentives should give the sector some boost, as long as people are comfortable in spending.”

Find out the key points from the Summer Statement 2020