INTERVIEW: David Melhuish, Scottish Property Federation
‘We have to make sure planning, regulations and tax don’t scare investors away’
When you’re organising a conference it is not always a good thing to rely on technology and politicians.
There was a problem getting an experiment in tweeting questions to work properly, and a little wobble as the event was about to kick off when David Melhuish began to think one of his panel speakers was not going to make it.
In the event MSP Kenny Gibson managed to complete a busy schedule chairing the finance committee to dash across the road from the Scottish parliament to join a gathering of property professionals at Dynamic Earth.
“I was just beginning to panic,” admitted Melhuish who was hoping there would not be a second call off following Finance Secretary John Swinney’s late withdrawal from the Scottish Property Federation’s annual conference. Alex Neil, the Communities Secretary, stepped in as a late substitute.
“It was good of him to do that. In fact, we are lucky that the politicians do make an effort,” says Melhuish, for whom a good working relationship with ministers is a vital part of his job.
Since becoming the SPF’s first director in 2007 he has built a rapport with government on behalf of the organisation’s broad range of members who include developers, investors and fund managers. The conference brought together more than 250 of them and their main message to the politicians this year was to create the right conditions that will maintain the interest of global investors.
According to one source, Scotland is listed among countries such as Russia, Greece and Turkey as an investment risk, largely because of uncertainty surrounding its new tax powers and the possibility of a second referendum on independence.
“Flows of international capital can come down to perception,” says Melhuish. “Our message to the government is that a lot of industry is dependent on this global capital and we have to make sure the planning rules, regulations and levels of tax don’t scare it away. ”
Alex Neil took the opportunity in his address to note the 91 foreign direct investments into Scotland last year valued at £430m and creating more than 9,000 jobs, making Scotland second favourite location in the UK to London.
However, SPF chairman Chris Stewart (right) came on stage after him and pointed out that Lambert Smith Hampton reported an 11% slide in investment in commercial property in Scotland in 2015 compared to a 23% increase in the rest of the U.K.
“External capital looks unemotionally on Scotland,” he said.
Melhuish says the need to keep foreign investors happy is. in large part, a result of the banks no longer being the prime backer of property developments.
“We have to look to alternative sources of finance and much of that comes from overseas,” he says.
His attention is also focused on matters domestic, including a number of recent tax changes such as the land and buildings transaction tax.
“We were pleased with the new bands. It seems Mr Osborne [the Chancellor] also liked the idea as stole it,” says Melhuish with a grin.
The Scottish government in turn followed Mr Osborne by imposing a 3%supplement on additional homes. The SPF successfully lobbied for it to be modified so as not to penalise small home builders.
There has also been a small victory on the government’s removal of rates relief on unoccupied property. Owners of industrial land will now get six months relief instead of three, although it doesn’t satisfy the industry.
“Scotland does not have the same level of pre-lets as in England. It means we are likely to see even fewer speculative developments. Landlords don’t want to sit on large properties with no occupier and no income,” says.
“We still have some work to do on that one.”
Education: Hull University (politics)
Career Highlights: parliamentary liaison officer for the Association of University Teachers; Royal Institution of Chartered Surveyors; British Property Federation
What do you find frustrating?
Technical glitches at conferences!
I do Naval Reserve work at Rosyth
Anything else to add?
This is the first time I have worked for a chairman who is younger than me.
Photography: by Terry Murden