Alistair Darling, chancellor of the exchequer, has scrapped empty property rates for properties with an estimated value of less than £250,000 - which he says represents around 70% of empty commercial buildings in the UK.
Revealed today in the pre-Budget report, the change will take effect from the financial year of 2009/10 - April next year and at the moment is only temporary. The exemption will apply for properties with a rateable value of less than £15,000.
The announcement follows months of lobbying from the industry, the British Property Federation and Property Week. But the change is not as comprehensive as hoped for by the industry.
£15,000 rateable value equates roughly to £20,000 annual rental value, according to rating experts - which means the exemption only applies for properties worth less than around £250,000 at most.
Martin Davenport, rating partner at Hartnell Taylor Cook, said: 'It will help small businesses so that is a good thing. At least he has done something but it is not far enough, especially in London, and I do not see how it will prevent people from demolishing properties.'
However, Nigel Reynolds of Sapcote Developments, which develops small industrial units, called the change: 'A definite step in the right direction.'
Alex Hoodless, partner at M3, said: 'The word I would use is irrelevant. It does not help any of our distribution or logistics clients. It will help the man on the street, which is a good thing. It is temporary as well so they will go back and enforce it one day. Of course it's a help and in these times it shouldn't be begrudged: but still, I would say it is irrelevant.'
Mike Flecknoe, rating director at Atisreal, said: 'We welcome this relief but there are also small businesses, particularly in the retail sector, who have single properties with rateable values above the temporary threshold and this offers no support to them whatsoever. We also have to look at the bigger economic recovery picture and bigger businesses also need relief. We need to remove this hurdle to recovery full-stop - if we start to turn the corner and there is an absence of buildings because so many have been demolished, we'll have a huge problem.'