Warehouse owners are demolishing empty buildings to avoid paying business rates, the United Kingdom Warehousing Association (UKWA) has warned. The warning follows the implementation of the Empty Property Rate Rules on 1 April.
Under the Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008 Act, warehouses vacant after six months will be charged the same rate as occupied warehouses. Ministers have justified the move by suggesting it encourages owners to re-let or redevelop their empty sites.
The trade body estimates that an average 10,000m2 warehouse may receive a rates bill reaching £250,000 per year. Charles Partridge, rates and property advisor to the UKWA, claims potential investors will also be affected by the new rates rules.
"They 
won't build speculatively with such uncertainty. So when the market eventually turns around, there won't be a supply of empty warehouses, and then rent rates will go up."