The UK needs to take a leaf out of America’s book and build its way out of the recession, according to a leading Midlands property developer.
Trigram Properties director Bill Houle believes the health of the property industry is intertwined with the robustness of the British economy and that government investment would help alleviate the recession.
He said: “The importance of property as an economic pointer is recognised worldwide and an increase in property values and re-start of property transactions will be the first signs of some sort of return to normality.
“Putting large chunks of government money into bricks and mortar is far better than giving it to the banks. Let’s look at USA – President Obama has had the foresight to advocate a one trillion dollar recovery and reinvestment programme to rebuild America for the 21st century.
“Tragically, in the UK our government has it all wrong – the VAT cut for example is a costly mistake, being simultaneously hugely expensive to the Government in loss of tax revenues and simply not enough to encourage additional spending. This is further evidenced by the fact that even with the huge reductions in personal debt associated with minimal interest rates and the consequent savings on mortgage and credit card payments etc; the public is still not buying.”
Mr Houle – whose projects include the multi-million pound grade A Birmingham office scheme Langley Point, which Trigram is building in conjunction with partnership developers Folkes Holdings – argues government money would be better spent on new-build projects.
He said: “Investing money into major projects with big construction budgets would have positive implications for employment, manufacturing and the associated professions. In Birmingham, we have a new library to be built, new colleges to be constructed, a transport policy to be designed and implemented and new hospitals to be delivered.
“However, funding for these must be robustly pursued as the latest news on Birmingham’s long-awaited Metro – namely it has been cut back to less than half the length originally proposed – represents a climb-down that will not resolve the city’s transport problems.
“The start of the recession was exacerbated by excessive poor property legislation as stamp duty increases, HIPS and void rates all combined to slow the market down.
“Undoing poorly drafted weak legislation would help restart things and promoting key projects in the public sector would bring even quicker recovery.”
Mr Houle said: “Current market conditions with low property values and lack of market expectation affords a real chance to sort out some of the long-term problems with public services, infrastructure and the provision of facilities for the 21st century.
“The US recognises this and their government is working on a bipartisan approach to deliver a rapid end to their recession. We need to seize the opportunity here. The Government needs to learn the lessons of the past 30 years in order to unite the public and private sectors together and deliver a brave new economy.”