Empty rates legislation is "significant" - commercial mortgages

18 July 2008

The recently introduced ''empty rates'' legislation is "significant" for property investors and people with commercial mortgages, it has been suggested.

Office owners are now obliged to pay rates on their investment regardless of whether or not it is occupied, which was not the case until recently.

This could be a consideration for anyone making a commercial property investment because owning an empty area of real estate might now prove costly, Matt Oakley from the British Council of Offices maintains.

In most cases, a revenue stream will be attached to the commercial property in question but where this is not the case investors now need to think more careful about how best to manage their assets.

"If you were to buy an empty property you start paying rates from day one, so you have a cost whether or not you have an income," Mr Oakley explained.

Returns from commercial properties fell by a total of around 1.5 per cent over the course of last month, the UK Monthly Property Index from IPD revealed.