Newspaper article The Journal (Newcastle, England)

Empty Property Rates: Could Localism Be the Answer?

Newspaper article The Journal (Newcastle, England)

Empty Property Rates: Could Localism Be the Answer?

Article excerpt

Byline: KEVAN CARRICK

IMAKE no apology for raising once again the detrimental effects of the Empty Property Rate (EPR) tax on the property market.

In Newcastle and other cities and town centres across the North East, we are at the point where the supply of decent quality office space and industrial space across the region is running out and no more is being built.

There are three factors at work here: low demand, lack of finance and EPR tax.

The first two will be washed away as the economy improves and confidence is regained. But EPR is perhaps one of the biggest deterrents to more space being built. It's simple; neither developer nor funder will take the risk of building space if there is the likelihood of paying EPR because a tenant cannot be found.

When the Government of the day scrapped empty property rate relief on commercial properties in April 2008, it heaped a new financial burden on landlords and occupiers.

It was thought the tax would encourage reluctant or recalcitrant landlords to reduce rent and other lease terms to let vacant space.

At the time, I and others commented that this was not a problem in the North East nor, in fact, in any region other than London and parts of the South East.

EPR has done much damage and plays a significant part in holding back economic development but it is now a vital tax raising source for Government and difficult to replace.

The insidious effect is the 'one size fits all' approach which continues to damage regional economies at a time when we need as UK plc to achieve economic growth and increase jobs.

This is an oxymoron when the Government has set up the Local Enterprise Partnerships to achieve just this. On the other hand, since the last election we have seen devolution through the Localism Act to help local people and businesses to drive local growth and jobs.

We are already seeing some councils making excellent decisions to support the development of much-needed properties as well as the North East Local Enterprise Partnership (NE LEP) providing loans from the Growing Places Fund to kick-start stalled developments and the Regional Growth Fund, which can be warehoused with match funding from the European Regional Development Fund. …

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