Monday, May 18, 2009
Unbelievably bad
FT Alphaville: Debts, defaults and UK commercial property
Commercial property looks like a catastrophy. Lest we forget though, this has been a land bubble, not a housing bubble (building costs rose with inflation), and the the only difference between residential property and commercial property is planning permission. I wonder if at some point commercial property will have lost so much that conversion to residential becomes a good idea. You do see the odd converted office building->flat conversion around.
Posted by stillthinking @ 07:41 PM (540 views) Add Comment
2 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. drewster said...
Lots of cities outside London north have had office->flat conversions in the bubble decade. I can think of several in Liverpool and in Bristol.
<rant>
It's completely stupid - the city-centre offices are converted into city-centre flats, but then all the jobs move to "office parks" on the outskirts of town, so city-dwellers need cars. However there's never enough parking in the new flats, and of course they're tiny inside, so people with jobs move out to the suburbs. City centre flats become slum towns; everyone becomes more car-dependent, making a mockery of the government's supposed green credentials. A lose-lose situation.
</rant>
2. mark wadsworth said...
@ ST, I've got into hot water pointing out that this was all a land value bubble, so it's safer to describe it as a 'planning permission value' bubble.
@ Drewster, genius, excellent summary. I must nick that.
What you miss is that if the council allows commercial -> residential conversions, it increases local tax receipts (council tax is kept locally) but reduces national tax receipts (council tax is a fraction of what business rates would be, but business rates are redistributed nationally), which merely exacerbates things. Surely far better for CT and BR to be at the same rates and for the same fraction to be kept locally?