Pictured above: LSH's Mark Clapham

Experts at the Birmingham office of national commercial property consultancy Lambert Smith Hampton (LSH) are calling for urgent Government action on business rates to avoid towns and cities becoming blighted by demolished buildings.

They warn that commercial landlords are in for a nasty surprise when they receive rates bills for empty properties, and may well resort to demolishing the building rather than pay hugely inflated rates.

The threshold for which properties become liable for empty business rates is due to drop drastically on April 1 from a rateable value of £18,000 to just £2,600. This means many owners of commercial property will find they are liable for rates on buildings which were previously rates free.

New rules on the rating of void commercial and industrial property were introduced by the last Government in 2008, aimed at discouraging landlords from leaving properties empty. The measure was then altered in recognition of the difficulties in the marketplace and a temporary relief was introduced whereby any property with a rateable value of less than £18,000 would be exempt. However, on April 1 that threshold falls to £2,600.

According to Mark Clapham, Director of Rating in the Birmingham office of LSH, the change couldn't come at a worse time. He said at a time when the commercial property market is still in the doldrums, many properties will become liable for vacant property rates for the first time.

"This is going to put many investors in a very difficult position. Not only have they seen falling capital values and are unable to secure an income from their property, they now have significantly increased outgoings at a time when interest rates on their loans are expected to rise. Many will find they are unable to keep up payments and may well resort to demolishing their buildings," he warned.

"The timing of this could not be worse and the Government needs to act. Otherwise we will see many more cleared sites as buildings are demolished and some investors are likely to default on their loans, further adding to the current difficulties in the property market," he added. 

He said some buildings, for instance listed buildings were exempt from the rates charge on vacant buildings and charities and community amateur sports clubs were eligible for mandatory relief of 80 per cent on their rates bills and may be able to apply to the local authority for discretionary relief. Anyone in doubt, or needing to find occupiers quickly should take advice from experts.

The Birmingham office of LSH - based in Edmund Street - offers the full range of property consultancy services across the whole of central England. The office delivers transactional and consultancy property services to both the private and public sector in industries ranging from banking, finance and telecoms to retail and transport. 

For more information about Lambert Smith Hampton, please visit their website here: www.lsh.co.uk