Lambert Smith Hampton and the Royal Institution of Chartered Surveyors have undertaken a survey to examine the impact of the change to Empty Property Rate relief on the property markets in England and Wales 12 months after implementation.
The Key findings
- The main cause of the increase in vacant property over the last year has been the downturn in the economy.
- However, there has been an increase in the demolition of perfectly sound properties over the same period, largely as a result of their liability to Empty Property Rates (EPR)
- Owners tend to wait about 12 months before considering demolition, so the level of demolition is likely to increase in the next few months.
- Alongside that, investment in new property has been discouraged.
- The combined effect of these impacts is that there is likely to be a shortage of commercial property available for occupation when the economy begins to pick up.
- This is going to have a significant negative impact on the ability of central and local government agencies to pursue property-led urban regeneration strategies.
- On the basis of this, LSH and RICS recommend that the Government should consider:
- Increasing the EPR relief to 12 or even 18 months before full business rates across all non domestic property become payable; or
- The removal or significant reduction of EPR across all non domestic property in full consultation with industry.
Download PDF (490k)