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Stormont must act to save our ailing property industry

Our local property market is on its knees with banks now the major controlling parties as they attempt to recover debt. However, our politicians are ignoring key areas where intervention could assist recovery.

I believe firmly that our political leaders are ignoring the deteriorating financial position within the property industry and that their ineptitude will adversely affect the Northern Irish economy's ability to recover and compete with other UK regions.

Consider the carnage in the high street where rates payments are far exceeding rentals and vacancy rates stand at 20%.

Surely, someone within government can make the connection between increasing vacancy levels and the inflexibility and inequity of our current rating system.

Factor in the burden of vacant rates liability and it does not take long to conclude that the collection of rates is going to become a hugely controversial issue very soon.

We need to revalue now in order to alleviate the disproportionate liability that rates have assumed within our retail market.

I have long been a critic of the Government's apparent destruction of our office market, which has arisen from the latter's insistence on introducing lease provisions that are effectively decimating capital values.

Indeed, I have been challenging this policy for some time now and am stunned by the Land and Property Service's (LPS) seemingly cavalier disregard for the damage that its policy has inflicted on development for inward investment.

Belfast has no new office buildings coming out of the ground as rentals have now reached a point where development is simply not viable.

The LPS's defence has been that it is protecting the public purse, but as tax revenues dry up, stamp duty receipts virtually disappear and inward investors cannot find new buildings to meet their requirements, I am left asking, "What is the plan?"

Unfortunately, there does not appear to be any plan. The private sector has had to adapt and introduce numerous strategies to survive the economic downturn. Nearly five years into the recession, the public sector remains basically unchanged.

The requirement to be re-elected weakens our politicians' resolve to take tough decisions, risks to effect growth and to scrap failed initiatives. Ironically, inward investment should be easier to achieve within a more stable political framework yet construction is non-existent.

Since the political will to tackle issues surrounding construction and development appears lacking, then at the very least, government should be working towards providing an efficient approvals system. Planning in Northern Ireland still takes an age to achieve.

At present, there is no new office development under way in the province and even if the private sector could take the risk, it is necessary to wait for at least 18 months to get planning approval plus an additional three to four years for development.

It is all too easy to hide behind red tape, process, consultation, regional variance and other excuses: we need our politicians to act.

For example, in recent correspondence with the Finance Minister's office, I was informed that my representations were regarded as ill-founded and highly contentious.

Having determined that I was intent on pursuing my challenge to current government office policy, the department has referred me to officials within the LPS, effectively washing its hands of the matter!

Therefore, I am right back to where I started in July 2010, back to the Government agency responsible, in my opinion, for creating and imposing the "modern government lease" and its destructive impact on our market!

Unless those in political power take urgent action, I remain deeply concerned that our property market will slip further into economic decline.

I urge interested parties to lobby for a radical overhaul of the present leasing and rating system.

Finally, we have to keep putting pressure on the LPS to undo the damage that its leasing policy has had on investment values and to develop appropriate and workable strategies that will alleviate the unbelievably disproportionate burden of rates on the retail market.

Martin McDowell, managing director, Osborne King Commercial Property Consultants


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