Further calls for help to get Britain building in The Budget

Latest News Tue, Mar 22, 2016 5:12 PM

Further calls for help to get Britain building in The Budget

Chancellor George Osborne is being urged again to increase infrastructure spending by lobby groups the Institute of Directors (IoD) and the Item Club.

The IoD, which represents 35,000 business leaders, says it "strongly" backs the government's deficit reduction programme. It says this can be strengthened by changes in infrastructure spending.

A separate report from the Item Club also calls for an increase in spending on such projects as roads and schools. The economic forecasting group says that Wednesday's Budget will contain bad news, with a downgrade to growth expected, as well as higher borrowing than planned. It says this means it is time for a "bold move".

Simon Walker, the director general of the IoD, said: "Chancellors should be judged on the tough decisions they make - not their popularity in the polls - so he must not budge an inch on the crucial job of deficit reduction."

The IoD says Mr Osborne should make the UK the "best place in the world to do business" and that he should make "further improvements" to tax, regulation and infrastructure.

The Ernst & Young Item Club report says the UK will escape further austerity, but it wants to see an extra £10bn in spending on infrastructure projects, which it says could boost growth by 0.6% next year.

Meanwhile Jones Lang LaSalle has announced new research showing the house price benefit of major infrastructure projects.

The research shows that house price growth due to Crossrail is spread unevenly, with areas around Crossrail stations in the west seeing a lower price impact than Tottenham Court Road, Farringdon and Canary Wharf, where mainstream prices are expected to grow by 40% between now and when trains begin running in 2018.

Adam Challis, Head of Residential Research at Jones Lang LaSalle explains "Some local residential markets will see a greater benefit from Crossrail. For example, the perennial problem with Canary Wharf has been accessibility to Heathrow. Journey times will be cut to 40 minutes and convenience greatly improved for both employment and residential.

"Farringdon will become a key transport connection being only one stop to Kings Cross/ St Pancras International. Given that it is not even on the Central line at the moment, Crossrail will significantly increase its relevance.

"Tottenham Court Road is the strongest performer in our research. This location is undergoing major regeneration made viable by Crossrail, with public realm improvements and new office and residential development. The East end of Oxford Street should re-join the area as a destination retail location. Almacantar's plans for Centre Point, if approved, will generate new residential price records in the local market. This is all happening on the edge of the West End, the most expensive real estate market in the world."

The research suggests that Crossrail will contribute to residential price increases of between 6% and 19% above already strong house price inflation for new build property along the route. Jones Lang LaSalle expects price growth of nearly 30% on average for all Central London residential development by 2018.

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