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Real Estate News Releases
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(EMAILWIRE.COM, March 24, 2009 ) UK - With so much emphasis being placed on the turmoil in the residential property markets, HowTo.co.uk looks at developments in the world of commercial property and at what MondayÂ’s Pre-Budget report means for commercial propertyÂ…
Whilst MondayÂ’s Pre-Budget report fell short of promising what the housing industry had been calling for, it did include a lot of changes that will impact the property market in the UK.
The commercial property world has long been saying that the Government risks causing ‘long-term damage’ to the economy if it did not announce a review review of empty rates in the report.
Some of the biggest names in the commercial sector have criticised the Government after it scrapped the relief enjoyed by retailers, offices and manufacturers on empty property taxes in April of this year, meaning businesses have to pay tax on a building if it is vacated for more than three months.
The tax has been labelled the ‘Bombsite Britain’ tax by critics because many businesses have chosen to demolish empty buildings instead.
In answer to their calls, Chancellor Alistair Darling has scrapped empty property rates for properties with an estimated value of less than £250,000 - which he says represents around 70 per cent of empty commercial buildings in the UK.
The change will take effect from the financial year of 2009/10 - April next year and at the moment is only temporary. The exemption will apply for properties with a rateable value of less than £15,000.
Still, the changes are not as far reaching as many had hoped for.
£15,000 rateable value equates roughly to £20,000 annual rental value, according to rating experts - which means the exemption only applies for properties worth less than around £250,000 at most.
The scrapping of empty rates relief has come at a time when demand for commercial property tumbles in the downturn. The latest figures from the Investment Property Databank showed commercial property capital values decreased by 4.3 per cent in October, the largest monthly fall in the 22-year history of the index.
But, as we head towards the end of November, the commercial sector is on the road to recovery, according to Miranda Munn, Managing Director of commercial property search engine, NovaLoca.
In October, there was a 27 per cent fall month-on-month in enquiries, for all types of commercial property, generated through NovaLoca.com.
However, since early November enquiries have returned to near-normal levels. “It would seem that, as our statistics suggest and other industries have long accepted, anything can be sold on the web and everybody uses it,” Ms Munn notes.
Agents have continued to market larger commercial buildings, with a large proportion of leads generated for buildings of 4,000 square foot or larger.
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