Member Article

How to keep the property revival on track

It has been well documented that 2014 has been a year of strong growth in the commercial property market. Enquiries are up, confidence is on the rise and deal-making is back in vogue again.

The fact that the economy has expanded by 3% in the last year – making Britain one of the best-performing economies in Europe – has fuelled expectation that the commercial property revival can be maintained.

However, without wanting to sound like a killjoy, we should guard against complacency. We can all recall what happened in September 2007, when the collapse of Northern Rock signalled the end of the economic boom and the start of one of the worst financial crises in recent history.

The Government needs to act now to keep the economy on track and safeguard the future of key industry sectors. For commercial property professionals, this would include:

1). Retention of business rate relief in enterprise zones – this would encourage the creation and growth of industry clusters in key sectors such as manufacturing, electronics and software. This would also help to reduce the number of unoccupied units within the enterprise zones.

2). Relaxation of planning laws – hopefully George Osborne will be true to his word and press ahead with the review of the General Permitted Development Order (GDPO). This would fast-track the conversion of warehouses and light industrial buildings into residential properties, helping to remove obsolete stock from the commercial market and create much-needed new homes.

3). HS2 rail extension to the North East – it is vital that HS2 is extended further north than Manchester or Leeds; ideally to Edinburgh. If it isn’t, the North East could miss out on vital inward investment opportunities.

4). Strong collaboration by the two local enterprise partnerships to bring more inward investment to the region. The Hitachi rail project in Newton Aycliffe could have a massive impact in terms of job creation, economic growth and increased activity in the commercial property market. We need more of these projects in the North East.

5). Low interest rates and other incentives to encourage more start-ups. This could include the extension of small business rate relief on existing properties beyond April 2015, as well as additional rate relief on newly built commercial properties, say for a period of 2-3 years.

By Neil Hart, director at Bradley Hall

This was posted in Bdaily's Members' News section by Bradley Hall .