However, the big picture for the commercial property sector, one of the mainstays of the UK economy, is that it has mostly been left high and dry and is unlikely to be given the government focus it deserves any time soon.
Pre-election giveaway will spell more delay for rating reform
With the 2015 general election clearly on the horizon, a politically-motivated, crowd-pleasing budget in March next year is a sure bet. Inducements to personal tax-paying voters will dominate, and the dire state of business rates is likely to be ignored for at least the next two years. With an estimated 40% of retailers overpaying rates, empty property owners continuing to pay the loathed empty property rate and a stalled speculative commercial property development market, we predict crippling increases in rates for some regions.
The country relies to a great extent upon a vibrant commercial property sector. Each day, millions of his target audience, the ‘makers, doers and savers’ and their employers, experience the benefits which quality commercial property brings to working lives, business efficiency and the success of the wider economy.
Unfair rates here to stay
Yet, in spite of all the warnings, full empty rate charges are levied upon beleaguered property owners, imposing unreasonable valuations upon sectors of the economy that most need help, while businesses make do with lower quality second hand property stock. The overall effect is to slow the economic recovery by delaying investment in property development, pushing up rents and discouraging entrepreneurs. Unfortunately, the 2014 Budget was another missed opportunity and, despite calls to the contrary, the question of rates reform has been kicked into the long grass once again.
This article is part of the spring 2014 edition of Rating in Brief.