It has been reported that one of the Chancellor’s routes to dramatically reducing the deficit in the National Exchequer is to sell off some of the Government Property Portfolio.
The Office for National Statistics suggests that the Portfolio in total is worth £370 Billion and the City Analysts estimate that the portfolio could be worth £500 Billion.
If reports are to be believed, the Government is looking at potentially releasing £149 billion, which will dramatically reduce the budget deficit.
A large scale or quick sale will have an adverse affect on the property market. There is no consensus as to the extent that a sale will take place nor is there a consensus by analysts and other commentators as to the affect this may have on what is most likely to be the commercial property market. We know it will have some affect on these matters but if the budget deficit is removed, this could have a positive effect on the rest of the country and the economy, which would to a large extent negate the adverse affects of oversupply of releasing these properties to the market over a shorter period of time.
However this is some months away as the Government do not have an accurate schedule of the property it owns. It therefore cannot rationally sell property either freehold or into Real Estate Investment Trusts when it simply does not know how much property all the components of Government owns and uses.
One of the few departments that has looked at what it owns is the Department of Health. This found out, following an inventory recently that it owned 77,000 buildings.