Could debt management solutions help commercial property investors?
Could debt management solutions help commercial property investors?
Monday 27th April 2009
Operators in this sector are among those feeling the pinch as the financial downturn continues to lead to an increasing number of empty properties both on the high street and in the industrial sector.
The tax levied on these investments is forcing some property owners to opt for demolition of the assets, according to the Royal Institution of Chartered Surveyors (Rics) and Lambert Smith Hampton's Empty Property Rates Survey.
Instead of seeking debt management solutions, properties in perfect condition are now being demolished by their owners and 85 per cent of respondents in the survey believe this action is in order to avoid paying the rates.
While three in four of the respondents (75 per cent) agreed that the phenomenon had increased since the levy was introduced a year ago, eight in ten (79 per cent) were of the opinion that the rates would negatively impact upon town regeneration and speculative development.
According to Rics director of external affairs Gillian Charlesworth, the government's motives for lowering EPR relief were well intentioned when they were first introduced.
However, some investors are now threatened with debt as a result of the rates, which are "having the opposite effect and causing more damage to a sector that is already suffering".
"We have urged the government to give serious consideration to increasing the EPR relief to 12 or even 18 months before full business rates across all non domestic properties become payable," he stated.
According to debt charity credit action, the total secured lending on dwellings at the end of February 2009 was £1,227 billion.
News article brought to you by Debt1 – The debt management company.
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