Published: Thursday, 28th August, 2008 09:00
Rates misery costing tens of thousands.
By Alan Bunce
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EMPTY commercial buildings are costing businesses and individuals tens of thousands of pounds because of legislation brought in this year.
In April the Government slashed the rate relief available on empty buildings – meaning shops or offices left vacant for more than three months no longer get a 50% rate rebate.
Owners of industrial buildings, who used to get full relief when a building was empty, find their 'holiday’ stops after six months.
According to property experts in Reading that means charities, businesses and individuals are losing out and firms are knocking down unwanted buildings quicker. Rents are being driven down because major landlords undercut lesser rivals to keep buildings occupied.
Serviced offices which typically have to carry on average of around 20% vacant space are among the hardest hit.
David Janes, who runs Asmec with serviced offices in Bracknell and Theale, said: “It is quite a serious problem. This last year our rates bill has gone up £46,000 which is a massive amount of money for a small company.”
He is unable to charge the same rents as last year and he dubs the law change “another stealth tax”.
Linda Staker, ratings partner at Hicks Baker, said the legislation will discourage development and developers will be more reluctant to market buildings.
She added: “Instead of leaving a poor quality building, they are saying. 'Let’s knock this down’.”
That, she said. means charities aren’t getting cheap or rent-free short term leases on empty buildings.
Rod Thomas, head of rating at Vail Williams, highlighted one warehouse building in Basingstoke Road demolished early as a direct result of the legislation.
But he said: “The real pain is for private investors. You or I might have inherited a shop or an old warehouse and the economy goes under so it’s empty.
"Not only do you not get an income but you are forced to pay tens of thousands of pounds in business rates. Some people must be at their wits’ ends.”
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