Will Matthews, head of commercial research, at global property consultancy Knight Frank, who have Yorkshire offices in Leeds and Sheffield comments:
The prospect of a ‘stability dividend’ for the UK
“For a document that focused on ‘change’, the Labour manifesto contained a strong focus on continuity, at least in the fiscal sense. However, that should be good news for anyone still scarred by memories of the 2022 mini-budget, and the spike in bond yields that followed.
“And if stability seems a modest victory, then one must only look to Europe, where bond yields have risen in response to recent political uncertainty. In the eyes of many global real estate decision makers the UK today looks, arguably, a little more like its pragmatic former self.”
Industrial strategy – but on a budget
“Much has been said of Labour’s industrial strategy, but unlike the Inflation Reduction Act in the US, this is not one of big spending promises, mainly because the fiscal capacity just isn't there.
“Looking at the manifesto, we can expect a relatively small investment into ports, supply chains, and green industries. Financial services is mentioned in a positive light. Labour has also recognised the importance of life sciences to UK growth, while data centres will be reclassified as nationally significant infrastructure projects, allowing planning decisions to be made by ministers rather than local councils. Critics however, will argue that the plans lack the radical, transformative changes needed to achieve Labour's ambitious target of the highest sustained economic growth among G7 nations.
“The underlying assumption is that economic and political stability, combined with targeted government backing in specific areas, will be sufficient to entice investors back to the UK, with knock-on effects for real estate demand.”
Planning and infrastructure reform
“Labour wants to streamline the planning system, admittedly with a focus on housing, rather than commercial real estate. The addition of one planning officer per local authority may not move the dial too far, but at least signals intent. The ultimate objective is to unlock more private sector capital, with UK pension funds and insurance companies seen as potential sources of capital for domestic investment, be that in UK PLC, or long term infrastructure projects. This is not a new idea, but one that if implemented well, offers significant promise.
“Several policies mooted should be supportive of the logistics sector. These include the manifesto pledge to invest up to £1.8bn into port infrastructure across the UK, as well as substantial investments in new roads, railways, and other significant infrastructure projects, along with a focus on fixing potholes and upgrading the electric vehicle (EV) charging infrastructure.”
