Government Bills that will impact on commercial property

Since the coalition was elected there has been much discussion and media coverage with regard to the ‘Big Society’ and how this will work in practise.

For many the ‘Big Society’ has already existed for many years and many charities, local organisations and parish councils have operated for years using volunteers and those who are passionate with regard to the work that they do.

The government’s intention to extend and introduce the ‘Big Society’ is really more of an extension in that it is intended to allow local people to have more say and involvement in their community. In some cases services which have been provided by the local authority could end up being run as businesses by the local community. Already we have seen situations where villagers have taken over and in some cases purchased the local village public house or general store, rather than allow them to close and the village being without either a local pub or shop.

The localism bill has been debated since it was first proposed in December 2010 and is likely to become law in England before the end of the year. The idea being to extend the powers of local communities, enabling them to do more for themselves and to achieve the goals they want in the area they live, without relying on the local authority or interference from Whitehall. The full extent of the legislation is yet to be finalised but there will be changes both for local communities and councils. Commercial property is also likely to be affected in that the changes with regard to the planning system and that relating to social housing are also likely to be included in this bill.

The localism bill will work so long as people realise that they can no longer rely on the government to provide all the services they require and this gives them the opportunity to take over and run some local services themselves.

Planning law which has in recent years become much more complicated since the first important planning law in 1947 is likely to be consolidated and the government hope, made simpler. Part of the change will enable local communities to have much more of a say in the way residential and commercial property is planned for the future and there is likely to be a great emphasis on the need for new development in an area rather than sticking to rigid government policy which has for years controlled and governed the way new development is planned. Sceptics are worried that such changes will enable green belt land to be allocated for development and much of the rural countryside will be spoilt if new development takes place.

Quite how all this will work in practise remains to be seen but such radical new legislation shifting the power to local communities and the extension of power to the ‘Big Society’ will create opportunities for the property sector.

The media will undoubtedly be covering over the next few months details with regard to many parts of the bill including how a community asset register will work, the introduction of a general power of competence giving local authorities greater confidence in adopting innovation and entrepreneurial approaches to the way in which local services should be provided.

Commercial property will undoubtedly feature strongly, if the bill works and public sector estates are reduced then professional advice will be needed by those implementing the ‘Big Society’ policy.

We also hear regularly in the media of climate change and the effect that carbon emissions have and are likely to impact on the way we live in future.

Under the ‘Green deal’ energy performance certificates have been needed when residential property changes hands whether it be for sale or let. There has also been a requirement for when commercial property changes hands for there to be an energy performance certificate which informs a prospective owner or tenant as to the energy efficiency of the factory/ shop or office they are looking to occupy. The energy performance assessment on commercial property is much more complicated than that for residential property and the construction of the building, the type of heating, air conditioning and other relevant factors are taken into account. The ‘Green deal’ plan will introduce financing mechanisms to provide up front capital investment needed to retro fit existing buildings to make them more energy efficient. There will be eight conditions introduced for occupiers of both commercial and residential properties. The idea being that such financing will help to get properties more energy efficient. At the moment new occupiers have advice in the energy performance certificate as to how they can make their property more energy efficient, the idea being to try and encourage people to reduce the carbon emissions given off by a building.

Gradually commercial property will be further affected by this new legislation in that from 2018 there will be an obligation on commercial landlords of vacant property to bring their properties up to a defined threshold before it is reoccupied and it is likely that properties which have a rating of F and G could be subject to improvement works to bring the property up to at least an E standard and this will become mandatory. Details are still emerging as to the way the ‘Green deal’ will work in practice, but the intention is to reduce energy bills for occupiers. Undoubtedly there will be much discussion as to how this will work in practice.

The Wyre Forest Commercial property scene has over the last month shown continuing signs of improvement particularly in the industrial sector where levels of enquiry for warehouses and factory units have increased and Doolittle & Dalley have noticed that the enquiries that are now being made are not just from companies considering making a move, but from those who definitely are going to make a move either by renting or purchasing a property which will enable their business to grow. Although the levels of enquiry are still lower than we would like to see and there is still some hesitancy in the market, the fact that enquiries are on the increase is encouraging during these volatile financial times.

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