Watch your Property Costs in Economic Slowdown

15/07/2008

Most businesses, large and small, are being affected by the economic slowdown and beginning to look at where some costs can be saved.  Property costs will be among those being examined and they can give scope for reduction, says Mark Bunting of commercial property consultants Aitchison Raffety.

Whilst rent is normally fixed for a specific term it is worth acting if it is due for a rent review.   “The last few years have seen rising rents but in the last eight months there has been a significant downturn in both the investment and lettings market with fewer property transactions.  Fewer transactions mean there is little evidence to base rent reviews on and whilst landlords may try to use evidence from eight months ago this will not necessarily reflect current conditions.  Therefore in the current conditions it is vital that tenants are represented by a rent review surveyor” says Mark Bunting.

Rates is another area where it could be possible to achieve a reduction.  The local council charges business rates but the Valuation Office assesses the rateable value.  The information upon which their assessments are based is often fairly brief and therefore over-assessments are frequently made.  A good rating surveyor will be able to advise on whether a reduction is worth pursuing.

Insurance and service charges are further areas in which savings could be made.  With insurance it is worth shopping around or using a good broker to ensure your insurance quote is as competitive as possible.

Service charge costs are normally levied by landlords for maintenance and upkeep of the building and common parts.  “Whilst these are often not capable of being reduced simply by asking, it may be possible to negotiate for certain things to be undertaken by the tenant and therefore either for costs to be reduced by using cheaper contractors or for some of the landlord’s costs to be saved” explains Mark Bunting.

Landlords will certainly not be volunteering rent reductions and reduced service charges but with a good chartered surveyor acting on your behalf it may well be possible to contain or reduce your property costs.  For further information go to: www.argroup.co.uk  or contact your nearest Aitchison Raffety office.