So, Rachel Reeve’s long-awaited budget has happened and, if you’re like me, you will be feeling some relief about the fact that this is all now out in the open after weeks of speculation.

But is this Budget (and this party) good for business? Well, the markets have certainly been rattled as they did the sums on borrowing vs proposed investment and found it difficult to stack. Whilst gilt yields (effectively the market’s confidence in the Government) remain high, markets seem to have calmed (at the time of writing), although I certainly wouldn’t rule out jitters in the weeks and months to come.

All the commercial property market actually wanted from this budget was a boost to both business confidence and investor confidence. Firstly, business confidence, because the occupiers of commercial property are (obviously) businesses, and anything that is bad for business is therefore potentially bad for commercial real estate. Secondly, investor confidence to provide nervous overseas and domestic investors the confidence to invest in commercial after the market being in the doldrums for the last two years (after Liz Truss’s mini-budget funnily enough!).

Did Mrs Reeves deliver? Well, I think we can probably say that on balance it was more a negative for the commercial market than a positive. Below, I break down the various announcements and how I think they will affect both business and investor confidence.

Occupier costs
Businesses’ fixed costs are very important for commercial property, as rent affordability is directly related. When assessing the affordability of units to rent, tenants will treat it as a residual of their fixed costs – i.e. staff costs, business rates, energy costs, costs of merchandise etc. Businesses have had a double whammy in the budget. Both national insurance and minimum wage increases are going to escalate staff costs substantially; It also looks like the Labour Party are not going to deliver on their manifesto promise of a full-scale overhaul of the business rates system.