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gruffydd

Anecdotals - Commercial Property, Midlands

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Here are a couple of anecdotals picked up recently.

(1)Was at a smallish manufacturing plant in the Midlands yesterday.

Owner has been trying to sell up - selling up is more important than keeping the business going, as he can't afford to keep paying the mortgage for the unit he bought 2 years ago, despite the fact that the business is in profit.

3 sales have fallen through in the last 6 months - 1 at the beginning of the week - purely because of the credit crunch - property developer couldn't raise the money (the property developer is looking to demolish the unit - has already purchased the neighbouring 2 - and put up a residential estate.

He went on to explain that owners/investors now have to pay full rates on EMPTY units across Britian, so that's a factor putting people off investment in the commerical property sector. I don't know how true this is.

(2) Visited a branch of a major EA in Pembrokeshire the day before - visiting an Aunt down in Chaverfordwest - the negotiator said that the people buying properties at the moment are the ones who don't need mortgages, though volumes haven't collapsed.

G

Edited by gruffydd

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Was the guy right in what he said about full rates on empty commercial property?

Yes.

Changes are being made to legislation on 1st April 2008.

This change will affect all owners and landlords of empty property.

In May 2007 the Minister for Local Government published new legislation affecting Non Domestic Rates payers. It focuses on empty business properties like offices, shops, warehouses and factories being brought back in to commercial use.

Currently, nearly all empty commercial property receives 100% relief from payment of Business Rates for the first three months and then a 50% charge thereafter. Factories and Warehouses should receive 100% exemption for business rates regardless of how long they remain empty.

However, from 1st April 2008 this relief changes.

From 1st April 2008, commercial properties that are empty will be liable for the full Business Rates charge after the initial three-month exemption has expired. Where the commercial property is a warehouse or factory, the full Business Rates Charge will be payable after the property has been empty for the first six months.

There is still an exemption on commercial properties that are owned and left empty by either a Charity or Community Amateur Sports Clubs. These should be granted 100% exemption from the Business Rates charge.

Landlords and Owners of property who are currently paying empty rates or who do not pay business rates for their empty properties need to be aware of the changes coming into force from 1st April 2008. There are still some regulations to be finalised by the Government and more information will be provided, as it becomes available.

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