A leading property expert is calling for a review of the current rules surrounding void rates liabilities following the recent publication of data by the Department for Communities and Local Government, which shows a significant anticipated increase in the amount of void rates relief claimed by both landlords and tenants.
According to the data, the amount claimed is projected to increase from £2bn in 2011/12 to £2.5bn in 2012/13 and £2.7bn in 2013/14. The majority of this year’s claims are expected to be charitable relief (£1.3bn), empty property relief (£863m) and small business rate relief (£455m).
Rohan Short, Head of the Rating Department at CBRE Bristol, says that since the thresholds for void rates liabilities were dramatically reduced a few years ago CBRE has noticed a number of instances where the potential amounts payable have impacted on investment decisions and adversely affected property values.
He said: “While many avoidance tactics are legitimate, having been tested in court over recent times, there are a number of unscrupulous operators in the market. A review of the current rules is probably required to assist property owners and occupiers, reduce bureaucracy, improve cashflow and potentially, market liquidity.”
Rohan added: “The amount of charitable relief claimed has increased steadily from £850m only four years ago. The physical evidence of this is the steady proliferation of charity shops on the High Street, which while reducing vacancy levels, is not necessarily contributing to the vibrancy of our retail centres.”
