Autumn Statement 2023 – real estate perspective

24 November 2023

The Chancellor set out his stall with a headline-grabbing reference to the “110 growth measures” included in the Autumn Statement.

Of those measures, there were a number of key themes relevant to the real estate sector, including:

  • removal of planning red tape;
  • accelerating access and connections to the national grid;
  • unlocking of foreign investment;
  • levelling-up opportunities; and
  • cuts to business taxes.

Planning, housebuilding and homes

The Chancellor acknowledged that “it takes too long to approve infrastructure projects and business planning applications.” In response to such bureaucratic delay the Autumn Statement provides that, from next year, the planning system will be reformed to allow local authorities to recover the full costs of major businesses’ planning applications in return for meeting faster timelines. The penalty for failing to meet accelerated timetables will be financial, with applications being processed free of charge.

Positioning the Conservative party as “the builders”, the Chancellor also announced a raft of additional measures to unlock housebuilding:

A pot of £110m over a two-year period will be available to fund nutrient mitigation schemes, which it is estimated will unlock 40,000 new homes. The planning backlog will also be "busted" (albeit greater detail as to how this might be achieved is awaited) with new housing quarters being developed in Cambridge, London and Leeds. The Autumn Statement also includes reference to a £3bn extension to the Affordable Homes Guarantee Scheme to assist in the delivery of 20,000 new homes and a further commitment of £450m to the Local Authority Housing Fund.

Somewhat surprisingly, the Chancellor announced a consultation on a new Permitted Development right under which any house can be converted into two flats, provided the exterior of the building is unaffected. This announcement has been met with some scepticism in the real estate market as to how effective a measure it will prove to be in addressing housing need, combined with concerns about the quality of rented accommodation that will be produced under such a right. Additional challenges may be presented by property deeds restricting any such development and, from a cost perspective, small scale development financing may well be prohibitively expensive in the current interest rate environment, if it is available at all. In their response to this proposal, the UKGBC expressed concern that “conversions mustn’t leave people crammed into unsuitably small spaces without natural light and they must meet decent standards of insulation and ventilation as well as low carbon heating.

There was one nod to leaseholders in the Chancellor’s statement. Local housing allowance will be unfrozen and the rate will be increased to the 30th percentile of local market rents. More might have been expected given the general ‘buzz’ around leasehold reform and tenant protections, but it appears those changes will remain primarily of a legal, rather than fiscal, nature.

As of 2 November 2023, the Bank of England voted to maintain the interest rate at 5.25% and on 21 November 2023, Andrew Bailey, Governor of the Bank of England, told the Treasury Select Committee that a lowering of the rate in the near future is unlikely. Perhaps by way of balance to this, there is some help for the housing market and first-time buyers in the form of an extension to the existing mortgage guarantee scheme. The scheme will continue to take effect until June 2025, during which time buyers will be able to acquire their initial property (subject to a maximum purchase price) using a 5% deposit. 

Business rates

Retail, hospitality and leisure businesses have benefitted from a year-long 75% discount on business rates. In the Statement, the Chancellor announced that this would be extended for another 12 months in recognition of the “importance of pubs and high street shops.” For larger businesses, the standard multiplier for business rates will apply in line with inflation. This will disappoint some business owners (notably the signatories to a letter to the Chancellor from the retail industry) but the Chancellor stated that it was not possible to “continue temporary support” across the piece and noted that the Government had, to date, protected a third of properties from business rates by making broad relief available. Small businesses will, however, benefit from a freeze to the small business multiplier for a further year.

Last week, The Times reported (16 Nov 2023) that a group of retail and hospitality associations, had sent a letter to the Chancellor stating that removal of business rates relief and an inflationary increase in the rate payable would result in “business failures, job losses and boarded-up properties in our high streets”. Presumably the Autumn Statement announcement will ease the ‘cliff-edge’ that many feared they would be facing but, given that it does not apply across the board, larger retailers may still find that there is upward pressure on prices given that inflation remains relatively high. This may be exacerbated by the fact that the business rates increase in April 2024 will be based on the higher September 2023 rate rather than October 2023’s lower inflation figure. It remains possible that high streets and town centres could see a rise in vacant business premises as a result.


The Chancellor’s proposals seek to support the UK as the “third largest tech sector in the world” and the “biggest life science industry in Europe.” These measures will be of interest to those seeking to invest and develop in growing operational real estate sectors, such as life sciences hubs/clusters and data centres.

The Autumn Statement includes supply-side incentives to support innovative industries with targeted tax reliefs for research and development in digital technology, green industries, life sciences, advanced manufacturing and creative industries. A ringfenced amount of £500m will be used to fund further innovation centres to make the UK “an AI powerhouse” which will “build on the success of the supercomputing centres in Edinburgh and Bristol”. Investment into UK based computing will ensure educational and scientific institutions and start-ups can access necessary computing power.

Over a five-year period, £4.5bn of support will be available to “attract investment into strategic manufacturing sectors” including £520m assigned specifically for life sciences.

Investment zones, freeports and levelling-Up

The Chancellor announced new investment zones in the west and east Midlands, greater Manchester and Wrexham, which he stated would “catalyse £3bn of private investment.” The investment zones are in addition to those 12 previously proposed by the Chancellor, with the intention that they will operate as “mini Canary Wharfs.” Financial incentives benefit these new zones – the statement includes a pledge to double the flexible funding envelope for each investment zone from £80m to £160m by extending the programme and associated tax reliefs from five to ten years.

As anticipated, the Chancellor has extended tax breaks available to UK freeports by five years to avoid an abrupt ‘sunset’ on the current relief in April 2026. These measures will benefit each of the twelve freeport sites previously authorised by the Government. Since not all of the sites have been fully developed out yet, it makes sense for the extension to be permitted to ensure that the benefit can be capitalised on by all of the sites. To support this extension, the Government will establish a £150m investment opportunity fund (available over five years) to “support Investment Zones and Freeports across the UK to secure business investment opportunities” and will publish a Freeports Delivery Roadmap in December 2023.

Levelling-up was still firmly on the Government’s agenda, with the Chancellor announcing that they will proceed with £50m of funding for high quality regeneration in areas including Warrington and Eden Valley. This follows the announcement of round three of the levelling-up fund. 

Infrastructure connectivity

The Financial Times recently reported that Britain is out of favour with infrastructure investors with its attractiveness as a destination for private capital at an all-time low.” In the Autumn Statement, the Chancellor acknowledged the difficulties that businesses (particularly clean energy businesses) were experiencing in accessing the national grid. He has promised a full response to the Winser Review and has pledged to cut grid access delays for the majority of projects by 90% and for viable projects from five years to six months. It is estimated that the grid reforms could realise over £90bn of investment over next 10 years (based on £10bn per annum). This will be welcomed by both renewable infrastructure investors, where investment pipelines are heavily dependent on the availability of transmission infrastructure, but also developers seeking grid capacity, particularly for “energy hungry” assets such as data centres.

Climate change and Green initiatives

The introduction by the Chancellor of a fund of £960m for new green industries and the growth accelerator for clean energy (such as offshore wind and nuclear) will be vital for the country to meet its net zero emissions target and “to support strong clean energy manufacturing capacity across the UK and seize opportunities from the global net zero transition.”

The Government has also launched a consultation into proposals for a new "6-year Climate Change Agreements scheme" to begin in 2025, which would provide further reductions in the Climate Change Levy for eligible participants. The CCA scheme levy’s purpose is to make “energy and carbon savings through energy efficiency targets” and to “reduce energy costs in eligible industrial sectors… by providing a significant discount to participating businesses on the Climate Change Levy paid.

The Government has responses to its consultation on energy saving materials which closed in summer 2023. VAT relief available for on the installation of energy-saving materials will be extended to include additional technologies (i.e. water-source heat pumps). As per the Government’s consultation proposal, the Autumn Statement also reintroduces the relief for installations of ESMs in buildings intended solely for a relevant charitable purpose. Full details of this relief is expected to be published shortly.  

Procurement and supply

The Autumn Statement includes provisions designed to support small businesses, including continued efforts to try and improve payment practices and hence cash flow in the hope of facilitating more investment and innovation. The Government is hoping to encourage prompt payment by requiring firms bidding for government contracts over £5m from April 2024 to demonstrate that they pay their own invoices within an average of 55 days. This timescale will be reduced to 45 days in April 2025 and eventually to 30 days (on a date yet to be specified). From a real estate perspective this may trickle through to benefit the construction supply chain. 

Capital allowances

Business investment in the UK, both by private companies and government, has come under criticism for lagging behind other G7 countries. Therefore, as anticipated, the Chancellor made the previously announced “full expensing” for large businesses permanent. This means that the 100% first year deduction for a three-year period from 1 April 2023 introduced back in spring is here to stay. Companies will be able to write-off the full cost of qualifying plant and machinery, which the OBR has calculated will be worth £14bn over the forecast period. The Chancellor called this measure the single most transformational thing” to assist investment growth.

The measure is a clear benefit to companies who invest in plant and machinery (which are often fixtures or chattels within their premises) but will have the broader impact of “improving the UK’s capital stock” and incentivising inward investment. In response to this announcement, the BPF’s Melanie Leech said that “confirmation that full expensing will continue is welcome but the Chancellor missed an opportunity to go further and incentivise investment to upgrade older commercial and residential buildings to make them more energy efficient.

The Government guidance on full expensing has been updated to reflect the announced changes.


On 9 December 2022, the Government announced in a written statement and a collection of documents concerning reforms to the financial services sector that it will make changes to the real estate investment trust (REIT) rules. The Autumn Statement included proposals for changes to the rules governing REITs which build on the (piecemeal) amendments that have been trickling through following the UK Funds Review and the publication on 18 July 2023 of draft legislation for the Finance Bill 2023-24. It is intended that these changes will take effect quickly – coming into force from Royal Assent of the Autumn Finance Bill 2023.


There was little specifically aimed at construction businesses, other than the Government’s announcement that reforms to the Construction Industry Scheme will be introduced to give HMRC more power to remove gross payment status immediately in the case of fraud. The Government’s continued efforts to improve payment practices (see Procurement and supply above) and commitment to provide a further £50m to try and support apprenticeships will both potentially benefit the sector though.


This was  likely to be the Chancellor’s last autumn statement before a general election, if that election takes place as expected in late 2024. However, the Treasury will be hoping that positive effects of the Autumn Statement (economic growth coupled with reduced inflation) will be felt prior to the election.

The Chancellor’s Autumn Statement appears to respond to the economic factors at play in the U.K.– leveraging off the fact that “fiscal headroom has doubled.” The Chancellor promised that his statement would “focus on how we get the economy growing healthily again by unlocking investment, getting people back into work and reforming our public services.” His tone was undeniably upbeat, however, whether this is enough to pay economic and political dividends remains to be seen.

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