Fiscal Policy & Economic Backdrop
Summer 2017

A new Tenants’ Fees Bill was announced in the Queen’s Speech which will stop tenants in England having to pay money to letting agents. First announced in the 2016 Autumn Statement, the ban was supported by all three main political parties in their election manifestos and a draft bill is expected to be published in the autumn.

The repercussions of the Grenfell Tower tragedy are likely to touch all sectors of the tower block market, with new requirements for testing expected to be introduced in the coming months. At present, according to Estates Gazette, there are 300 new tall (over 20 storey) tower block developments in the planning pipeline across the capital.

The UK economy grew by 0.2% in the first quarter of 2017, with annual growth of 1.9%. This is remarkably resilient given the economic and political instability. However, the service sector, which represents close to 80% of the UK economy, posted its slowest quarterly growth in two years for the three months up to the end of June, with optimism at its weakest level since December 2011. Interest rates were kept on hold in June at 0.25% but there are indications these may rise in coming months as inflation (2.6%), continues to overshoot the Government’s 2% target and the Office for National Statistics reports that household disposable incomes fell by 2% in the first quarter of 2017.