Atomic Consultancy, the acquisition specialists founded by Lucy Noonan, reveals that whilst there has been a decline in business acquisitions across the UK in recent years, all signs point to a reversal of this trend in 2024 and a particularly busy time ahead for acquisitions across the UK property market as BADR tax hikes loom.
Atomic Consultancy has analysed the changing number of annual UK business acquisitions since 2020 to see how the market has changed over the past four years, before looking at how and why this trend is being reversed in 2024, especially in the UK property industry. The analysis covers three types of acquisition:
The data reveals that last year there were some 860 domestic acquisitions across the UK, an annual decline of -12%.
This decline in domestic acquisitions was largely mirrored by both inward and outward acquisitions, with inward acquisitions seeing an annual decline of -16% in 2024, whilst outward acquisitions were down by -5%.
TREND REVERSAL
But 2024 is bringing a reversal to the trend of declining acquisition numbers.
Despite historic trends, industry expert Noonan believes that the UK property market is bucking this wider trend and that 2024 has seen a notable increase in the number of property focused businesses being acquired.
This is largely down to the urgency spurred by the recent Autumn Budget, when it was announced that Business Asset Disposal Relief (BADR) will increase to 14% from April 2025 and then to 18% from April 2026.
However, it will remain at its current level of 10% until then and so whilst there will be an 8% increase in the next 18 months, there is still plenty of time for any business owners who are planning an exit to do so in a lower tax environment.
CHALLENGING
Noonan says: “While the past couple of years have been challenging for the UK as a whole, we’ve not seen this play out when it comes specifically to acquisitions within the property industry.
“In fact, there remains a significantly strong appetite to exit amongst estate agency owners and an equally keen landscape of buyers.
“In just three short years since launch, we’ve completed 97 deals and had to bolster our workforce in order to facilitate this high demand and we’re currently seeing no sign that this momentum is slowing.”
INTENSIFY
And she adds: “Moving forward, we fully expect this level of activity to intensify before BADR changes kick in, with the biggest hikes not arriving for another 18 months.
“We’re currently encouraging anyone who is planning an exit strategy in the next three years to bring those plans forward in order to beat the BADR changes.”
