Chancellor Rachel Reeves yesterday unveiled a sweeping plan to revitalise the UK’s sluggish economy, including backing a long-delayed third runway at London’s Heathrow Airport, expanding regional airports and creating a high-tech ‘growth corridor’ between Oxford and Cambridge.
In a speech to business leaders, Reeves positioned these projects as critical to unlocking the UK’s economic potential and making Britain ‘the world’s best-connected place to do business’.
But her vision for economic growth and housing development has sparked mixed reactions from key figures in the UK property sector.
While some welcomed her ambitious plans, others expressed scepticism about their feasibility and timing, with particular criticism levelled at the potential environmental and economic impacts of her proposals.
TWO HORNS OF A DILEMMA
Trevor Abrahmsohn, Founder and Director of Glentree International, offers a candid assessment of Reeves’ speech, describing himself as “caught on two horns of a dilemma”.
While he acknowledges the Chancellor’s commitment to growth and capital projects, he questions the consistency of her policies.
“Not three months ago, she designed a Budget that acted as a brake on growth, exacerbating unemployment and inflation,” Abrahmsohn told Property Soup.
“Now, she’s extolling the virtues of positive growth and rejuvenating capital projects. Unfortunately, she appears to be the obstacle, not the catalyst.”
And while Abrahmsohn welcomes the proposed extension of Heathrow’s third runway and the push for planning reforms to boost housing supply he warns that the benefits of these initiatives will take years to materialise.
“Even if the Heathrow expansion passes regulatory hurdles, the benefits won’t be tangible for a decade,” he says. “Similarly, the housing reforms, while welcome, will likely only bear fruit towards the end of her first electoral term.”
STIFLE GROWTH
He also criticises the government’s approach to taxation and rent reforms, warning that draconian business taxes and the Renters’ Reform Bill could stifle growth and exacerbate housing shortages.
“The Renters’ Reform Bill will frighten remaining private landlords into divesting their buy-to-let properties, reducing supply and pushing up rents. This will further disenfranchise the vulnerable.”
And he adds: “The Prime Minister warned us that conditions would get worse before they get better, and now the Chancellor is urging us to embrace Trump-like positivity. These mixed messages are becoming the norm, and it’s no wonder the government is facing record levels of dissatisfaction.”
BALANCED APPROACH
Nathan Emerson, Chief Executive of Propertymark, struck a more measured tone, welcoming Reeves’ focus on housing but calling for greater detail on how her ambitious targets would be achieved.
He says: “Many of the Chancellor’s words are welcome news for many people who live in England and Wales, and Propertymark has long campaigned for a balanced approach when looking towards future housebuilding ambitions.
“We hope that when the Planning and Infrastructure Bill becomes law it can deliver the correct level of housing in regions where demand is prevalent.
“It is reassuring to see housing play a key part of Ms Reeves’ mission to make Cambridge a technological hub by delivering 4,500 new homes.”
Biut he adds: “However, with continuous guarantees to build more homes, more detail is needed as to how the Chancellor will develop the UK’s workforce and skills to meet its ambitious targets as currently the UK Government would need to build thousands of new homes every week before the next election to meet its goals.”
NOT CONVINCED
But London Mayor Sadiq Khan has already voiced strong opposition to the proposed expansion of Heathrow Airport, citing environmental concerns and the impact on local communities.
And in a statement just minutes after Reeves delivered her plans he said: “I remain opposed to a new runway at Heathrow Airport because of the severe impact it will have on noise, air pollution and meeting our climate change targets.
“I will scrutinise carefully any new proposals that now come forward from Heathrow, including the impact it will have on people living in the area and the huge knock-on effects for our transport infrastructure.
“Despite the progress that’s been made in the aviation sector to make it more sustainable, I’m simply not convinced that you can have hundreds of thousands of additional flights at Heathrow every year without a hugely damaging impact on our environment.”
