Specialist lenders targeting the commercial mortgage market are likely to be buoyed by an overhaul of the stamp duty on such transactions.
The government estimates 90 per cent of non-residential purchasers will pay the same or less Stamp Duty Land Tax (SDLT) under the new system, which is designed to help smaller businesses puchasing property.
This could be good news for challenger banks Aldermore (ALD), OneSavings Bank (OSB) and Shawbrook (SHAW) - which lend mortgages to SMEs - if property buying increases.
Companies will pay tax on property they buy according to a tiered system rather than a flat rate under proposals in the Budget. This is aimed at preventing large jumps in stamp duty as transactions move into higher tax bands.
Under the current system a business buying a property for £250,000 pays 1 per cent in SDLT. If the price is just £1 higher, the entire property is taxed according to the higher tax band and the group's tax bill will be trebled.
From March next year though, SDLT will be payable for each portion of the transaction that falls into each tax band. This means there will be a zero rate band on purchases up to £150,000; a 2 per cent rate on the next £100,000; and a 5 per cent top rate above £250,000.
This means, of course, larger companies could end up paying more in stamp duty, such as retailers eyeing a high-street property or a pub group considering a new location.
The government hopes to net £385m in the year 2016/17, rising to £590m in 2020/21 as a result of the new system.
Melanie Leech, chief executive of the British Property Federation, said commercial property investment often acted as a catalyst for regional growth but would now "undoubtedly slow".
"The real set back in today’s announcement is that development in places like the 'northern powerhouse' and 'Midlands’ engine' will now be held back as a result of this out-of-the-blue raid on commercial property transactions," she said.
"Over a decade ago, the government of that time decided to decouple the commercial and residential rates of SDLT recognising that the sectors were driven by very different factors and there was no logic in charging the same rates of SDLT on commercial and residential property.
"We can only hope that today’s announcement isn’t any unravelling of that logic."
