BFLNov.08 18/11/08 5:15 pm Page 16
property
THIS NEW LEGISLATION, the Rating cautious even to the extent that they do
(Empty Properties) Act 2007 which came not lend to other financial institutions. The
into force on 1 April 2008, could not have lack of funds in the market place has
come at a worse time as the credit crunch obviously had a knock-on effect on those
continues to bite well into its second year looking to expand or relocate.
and with the prospect of a recession The rationale behind the new legislation
looming. was designed to increase competitiveness
The economy is hitting all industry where by providing a fiscal incentive for owners to
it hurts and this at a time when not only let or develop empty property in order to
The current economic down-
the wealth, but the reduce rents. The thinking was that there
existence, of our financial would also be a more efficient market by
turn is not reflected in the
institutions now depends encouraging the use of empty land and
existing Rateable Values
on the sub prime rather property thereby providing opportunities to
than the prime. It has bring brownfield sites and redundant
become increasingly difficult for any buildings back into use. Government
organisation to raise finance and lending thinks it will also improve fairness in the
on property has been severely curtailed as taxation of property by applying a strong
many lenders are understandably more incentive to let or develop empty property.
The fiscal incentive that
On the back of more than a decade of rising capital
and rental values, Government announced in the 2007
budget the introduction of an increased tax burden on
those liable for empty property. They had the bizarre
notion that this would stimulate the market and be
good for business, both for UK Plc and the expected
expansion of dynamic small and medium enterprises.
DAVID BURKE from King Sturge reports.
16 building forleisure November 2008
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