'Many pressures' on commercial landlords

01 December 2011

Written by David Whittaker

Landlords for enterprises are finding the present economic climate difficult, K2 Business Rescue claimed.

Retail firms have had their plight publicised, the organisation remarked, pointing out many high street shops have closed and their occupants have moved out of more expensive locations or ceased trading completely.

Business rates expenses are approximately 40 per cent of the landlord's yearly rental income, which the group said can be a considerable burden for commercial mortgage holders.

Being liable for these expenses and receiving no rents from empty properties is heightening the pressure, it continued.

Furthermore, the firm noted some banks are asking for greater amounts of equity and "better tenant covenants" when renewing or initiating mortgages for business.

The Royal Institution of Chartered Surveyors recently predicted a rise in the number of distressed commercial properties in the UK during the immediate future.

Many individuals in the industry feel "completely boxed in, often with empty premises on their hands, unable to service mortgage liabilities, unable to pay business rates and increasingly dealing with creditor pressure", K2 Business Rescue declared.