Time to Diffuse the Rates Timebomb
6th November 2013
It has been generally accepted by nearly everyone in the property industry that the then Government’s rating of empty property has been an unmitigated disaster. The timing of the changes to empty property rates was particularly cruel given the financial crash, which created an almost perfect storm for the sector.
Over the last five years we’ve seen an almost blanket block on speculative development, meaning that Nottingham and other East Midlands’ cities have suffered from a lack of new build, which has hampered much sought-after inward investment.
We’ve now seen the Government attempt a slight climbdown by offering an 18 month exemption from rates for new build properties which enter the Rating List between 1 October 2013 and 30 September 2016. Talk about closing the gate after the horse has bolted…
What will this policy mean to ordinary businesses? In some cases, tenants of Grade ‘A’ office stock could see their rates bill hiked by something in the region of 50 percent by the time the 2017 revaluation comes around.
Nottingham, Derby and Leicester are such locations. All three cities have been hampered over recent years by a lack of new office space. Businesses moving into any new space over the next three years will be sitting on a rates timebomb, and might not be able to put a growth plan together.
Those three years will be crucial for the wider economy, but especially for the property sector, which has been harder than most. The recovery is almost certainly just around the corner, but this rate rise could stifle it at birth. It’s time the Government started listening to the property industry, and put in place measures that will excite developers and make them want to develop speculatively again. For too long now, demand has outweighed supply. This isn’t healthy for anyone involved in property. Things need to change – and fast.