The Government’s Empty Property Rates (EPR) legislation has resigned England and Wales to a continued boom and bust commercial property cycle, according to a new industry survey.
The EPR survey, by national commercial property consultancy Lambert Smith Hampton (LSH) and Royal Institution of Chartered Surveyors (RICS), is the first research into the controversial Government policy 12 months after its introduction and found that the rates continue to exacerbate property shortage and stifle regeneration and investment.
Mark Clapham, at LSH’s Birmingham office, said: “The industry believes that the demolition of property will increase significantly in coming months as the recessional plight of business is exacerbated by growing EPR debts.
“Many property owners are left with no option but to demolish buildings that are sitting empty – generating large EPR bills, but no income. This will leave the commercial property market with a shortage of stock when demand picks up.
“It is clear that the property sector wants immediate change from the Government, including a substantial increase in the relief available for owners of non domestic buildings, particularly given the current state of the market.
“Indeed the Pre Budget Report acknowledged the need for support, albeit limited, with the temporary exclusion from rate liability of non domestic properties with Rateable Values below £15,000 for 2009/10.”
More than 600 property professionals, who participated in the LSH and RICS survey, felt the Government’s overarching objective to provide an incentive for owners to return vacant buildings to use – has been highly unsuccessful.
Mr Clapham added: 85 per cent of professionals surveyed fear that EPR is negatively impacting on the regeneration of towns and cities. A key concern is that 92 per cent state that EPR policy deters speculative development – exactly the activity that is needed to rejuvenate brownfield sites.”