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Mipim 2016: Budget woes for PRS

Ever seen a well-dressed businessman on his knees throwing up in the rain?

Well, I have – just last night in fact, in normally upmarket Cannes.

It was probably down to the booze-fuelled networking sessions Mipim is famed for, but it could equally have something to do with George Osborne’s Budget.

The property world was fuming at the chancellor’s surprise move not to exempt corporate investors from the 3 per cent stamp duty land tax surcharge on additional homes.

This could have a big impact on firms buying large portfolios of properties for rent and so halt the momentum that has built behind the private rented sector over recent months.

It is unlikely it will result in the immediate scrapping of PRS schemes, but it sends a clear message from the government that it is not backing the sector as much as many would like.

The good news is it also seems unlikely to deter long-term institutional investors, such as Legal and General, which remains committed to the sector.

As L&G Property managing director Bill Hughes told me today: “It’s unhelpful… but it’s not a deal-breaker for us.”

However, it will be interesting to see whether this will prompt some investors to take on more risk, potentially partnering with developers to build and manage PRS projects. Could this be a way of avoiding the surcharge?

Elsewhere on the Riviera, people were celebrating the announcement of Haringey Council’s development partner longlist over a glass of Tottenham-brewed ale and local cake.

Firms including Galliford Try, Lendlease and Morgan Sindall made the cut, with a final partner expected to be selected by the end of the year.

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