Birmingham property rentals have become increasingly divorced from reality, according to a business rescue specialist.

Unless landlords start fully adjusting to the new market place then the number of vacant offices will grow, with the crisis getting worse, not better, according to Begbies Traynor.

John Kelly, regional managing partner at the firm’s Birmingham office, said landlords had got the message on empty properties, but the penny had yet to drop where it concerned existing tenants desperately struggling for survival.

He said: “Some of the rentals in central Birmingham had got increasingly out of line – £30-plus per square foot is difficult to sustain.

“Rentals are now being lowered across the city centre. Where there are empty properties landlords are getting the message – there are a lot of deals available.

“But that is not happening with hard-pressed existing tenants. Property companies need to nurse them through.

“If they won’t do that, if they refuse to offer concessions, then more companies will go bust and that will create more empty properties.

“Surely it is better to agree a reduced rent that keeps money rolling rather than risk ending up with nothing at all.

“Reality needs to dawn. There is a tenant/landlord/bank relationship in all this, there has to be discussion, and everyone needs to be realistic.”

Mr Kelly said a failure to come to terms with the new world order would prove costly for landlords after the Government’s controversial shake-up of empty property relief – it refused to back down, agreeing only minimal changes, despite howls of protest from around the sector.

“I can understand why the Government brought it in – it was designed to encourage landlords to let properties rather than leave them empty,” Mr Kelly said.

“The original concept was sound, but the timing was disastrous.

“Empty property tax arrived before the recession had fully bitten. It is an additional burden for a very distressed sector which it can ill afford.”

Mr Kelly urged the Government to think again and at least consider some sort of temporary suspension.