More than 75% of construction firms believe eco-homes will become a dominant trend in the future, and 56% believe the demands of a new generation of consumers raised in the digital age will revolutionise property requirements.
These findings are part of Smith & Williamson’s annual property and construction survey.
According to the survey, less than a quarter of respondents believe that online estate agency models will eventually replace traditional estate agents. Estate agents were even more dismissive of online models, with only 7% believing that they would replace traditional estate agents.
“With ever increasing property prices, we are beginning to see the differing demands of a younger generation, who are increasingly mobile, environmentally conscious, and able to decide where, as well as when, to settle down,” said Mark Webb, chairman of Smith & Williamson’s property and construction group.
“Developers are becoming increasingly aware that these people do not necessarily need their first home to be a house in the suburbs, but rather a place with excellent transport connections, enough internet capability to work from home, and increased built-in technology ranging from smart heating systems to being able to control the lights and security from their phone.”
The annual survey from Smith & Williamson, the accountancy, investment management, and tax group, polled over 200 respondents from the property and construction industries on topics such as business confidence, technological advancement, government policy, and access to finance, among others.
“Nearly 75% of respondents indicated that better tax incentives would aid in addressing the UK’s future energy issues.” However, we are increasingly seeing that a number of companies are unaware of the existing tax incentives available; for example, only 28% were aware of R&D tax relief and made regular claims,” said Mark Webb.
“We’ve seen an increase in the number of clients who fail to claim the full capital allowances available for certain energy-efficient equipment.” A company that is losing money can surrender these allowances in exchange for a refundable tax credit. Larger companies frequently fail to recognise the value of claiming the full 100 percent allowance in comparison to claiming the standard annual 18% or 8% writing down allowance. A company that wants to claim the 100 percent energy efficient equipment capital allowance must identify a specific model number on the product in question, but these details are frequently left out of invoices/data provided by the client/supplier. Without specialist input, it is difficult to secure the enhanced capital allowances (ECA) at a later date (when the tax return is delivered).
“HMRC has recently launched a consultation in an attempt to reform the business energy efficiency tax landscape.” A critical issue to address is the cost of going green; the initial unit cost of the base products remains extremely high. Because it is so expensive, many businesses ignore the benefits, regardless of the tax incentives.”
“The items that can be claimed are listed on the Energy Technology List.” However, it is constantly updated to include the most recent product variations. While this is a commendable effort to keep things current, we have heard anecdotally that it can result in products that are only a few years old being removed, leaving manufacturers with little incentive to refine the product, potentially lowering unit cost. Allowing products to remain on the list for longer periods of time may encourage manufacturers to develop more cost-effective methods of producing these energy-efficient items, which may then encourage developers to include these more cost-effective items.”
According to the survey, business confidence is increasing; belief in commercial property over the next 12 months was nearly equal to belief in residential property over the same timeframe, at 72 percent and 75 percent, respectively.
However, for the first time in the survey’s history, Central London is not the top reason for optimism, with property experts five percentage points more optimistic about Greater London delivering investment returns than the centre. Demand for prime Central London real estate has declined primarily as a result of changes to SDLT and continued planning restrictions, with many respondents increasingly encouraged by the prospect of development in Greater London.