More than 75% of construction firms believe eco-homes will become a dominant trend in the future and 56% feel that the demands of a new generation of consumers, brought up in a digital age, would revolutionise property requirements.
These findings come as part of Smith & Williamson’s annual survey of the property and construction sector.
The survey found that less than a quarter of respondents felt that online estate agency models will ultimately do away with the high street estate agent. Estate agents themselves were even more dismissive of online models; only 7% thought they would do away with the high street estate agent.
Mark Webb, chairman of the property and construction group at Smith & Williamson said:“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,”
“Developers are 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, sufficient internet capability to work from home and increased built in technology 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, which had over 200 respondents from across the property and construction industry, sought views on business confidence, the development of technology, government policy and access to finance amongst other matters.
“Close to 75% of respondents indicated that better tax incentives would help address the UK’s future energy issues. However, what we increasingly see is that a number of companies are not aware of the existing tax incentives available, for example only 28% were aware of Research & Development tax relief and made regular claims,” said Mark Webb.
“We have increasingly seen clients fail to claim the 100% capital allowances available to them for certain energy efficient equipment. A loss making company can surrender these allowances for a payable tax credit. Larger companies often don’t spot the value in claiming the full 100% allowance compared with claiming the standard annual 18% or 8% writing down allowance. A business seeking to claim the 100% energy efficient equipment capital allowance has to identify a specific model number on the product involved, but often these details are omitted from the invoices/data provided by the client/supplier. This makes it difficult to secure the enhanced capital allowances (ECA) at a later date (when the tax return is delivered) without specialist input.
“HMRC recently launched a consultation to try and reform the business energy efficiency tax landscape. A key area to address is the price of going Green; the initial unit cost of the base products remains very high. Many companies ignore the benefits, regardless of tax incentive, as it is so expensive.”
“The Energy Technology List contains the items that can be claimed. However, it is continually revised to include the most up to date variations of products. Whilst a laudable effort to keep things up to date, anecdotally we have heard it can result in products less than a few years old being removed, leaving manufacturers with little incentive to refine the product which could reduce unit cost. By allowing products to remain on the list longer, manufacturers could develop cheaper ways of making these energy efficient items which may then encourage developers to include these more cost-effective items.”
The survey demonstrated that business confidence is growing; belief in commercial property over the next 12 months was close to matching confidence in residential property over the same timeframe, at 72% and 75% respectively.
However, for the first time in the history of survey, Central London is no longer the top cause for optimism with property experts five percentage points more optimistic for Greater London delivering investment returns over the centre. Principally, following changes to SDLT and continued planning restrictions, demand for prime Central London real estate has declined with many respondents increasingly encouraged by the prospect of development in Greater London.