Government criticised for not listening over business rates

The government's report into the future of business rates has been called a sham by critics who argue that ministers didn't take any advice from businesses and representatives. Officials also failed to speak to Dutch counterparts despite being told by experts that the system in the Netherlands is similar and where business rate revaluations have been held yearly since 1997. Ruud Kathmann, of the Netherlands Council for Real Estate Assessment, said of the reform: "By a more frequent revaluation the differences between the previous assessed value and the new one would become smaller and that is easier to explain. Therefore we also expected a lower number of appeals." A report by the British Property Federation has called on ministers to learn lessons from overseas. Paul Turner-Mitchell, who wrote the report, said: "Businesses are getting fed up with the Government constantly asking for their opinions on how to create a simpler system and then ignoring the advice. The perfect example to learn from, yet the authorities didn't bother even making a phone call."

Business rates to be reviewed

George Osborne will announce a review into the structure of business rates which will be completed by early 2016, in his Autumn Statement. Experts have warned that the business rates system unfairly punishes high street firms with large properties and unfairly benefits online retailers with small premises. Some experts are calling for business rates on small premises to be scrapped altogether, arguing that of the 1.7m commercial properties on which business rates are paid, about 1m are used by small businesses. However, if such firms were exempted from business rates, it would reduce the Government’s take by only 6%. Simon Tivey, a rating expert at PwC, said: “There are huge numbers of very small properties that are contributing very little to the rates tax pot but no doubt costing significant sums out of the Valuation Office Agency’s £100m budget to administer.” One proposal submitted to the chancellor is for these small locations to be “bundled” rather than individually assessed for ratings.

Supermarkets must close one in five stores

Analysts at Goldman Sachs have warned that Britain’s biggest supermarket groups must close one in five shops to turn around their performance. In a report on the grocery industry, Goldman said the retailers had to close stores in order to reduce their cost base. Analysts said this would then allow them to compete with Lidl and Aldi, and grow profits. “Our analysis of the UK grocery industry suggests capacity exit is the only viable solution for a return to profitable growth,” Goldman said, adding that store estates needed to be reduced by around 20%. The analysts said that if current trends continue then sales in large out-of-town supermarkets will fall by 3% every year until 2020. This would mean that sales in larger stores fall by 18% over the next six years. Separately, Chris Keen of CBRE said that grocery retailers had added 3.2m sq. ft. of space last year but were likely to reduce this to 2m sq. ft. next year. He said that supermarkets were allocating more space to non-food activities. "We'll see more space given up to concessions, to sublets, to things like gyms. Supermarkets will have more of a department store feel."

Self-build home applications tumble

Construction data has shown that the number of self-build home applications have declined over the past four years, with a total of 16,792 applications submitted in the first three quarters of 2008, compared to 12,159 over the same span this year. In Wales, applications are down 62%, while in the Midlands and East Anglia they have fallen 35%. The Independent i, Page: 46, 47 The Independent, Page: 43

RICS: Market is in Mexican standoff

RICS has claimed that the UK’s real estate market became trapped in a “Mexican standoff” during October, as buyer demand fell for the sixth consecutive month, the longest streak of falling demand seen by RICS members since 2008. Across the UK, a net balance of -18 was recorded in its residential Market Survey, however, in some areas this fluctuated significantly. In London, 62% of property agents reported a reduction in buyer interest over the month – far above the national average. Just 41% of homes listed on the market in London were sold in October, while the level of available stock increased. The body’s house price balance fell to +20, from +30 in September. The drop was driven by a fall in London to -35, down from September’s -9. Anthony Codling, property analyst at Jeffries, says that there is a significant gap between price expectations and what buyers are willing to pay, a gap “which needs to close”. The trend was not observed in Scotland