The inability to rely on upward-only rent reviews could discourage investment in commercial property, Holly Andrews, director and loans manager at redhill-based KisFinance, has warned.<\/p>\n
The government plans to ban upward only rent reviews in commercial leases, which means there will be the potential for rents to fall when reviewed.<\/p>\n
She said: \u201cFrom landlord and investor perspectives, the inability to rely on upward-only rent reviews reduces long-term income certainty.<\/p>\n
\u201cThis is likely to discourage investment in commercial property, particularly for investors who rely on predictable rental growth, to justify borrowing and returns. Over time, reduced investment could lead to a contraction in supply, leading to shortages of suitable commercial premises.<\/p>\n
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\u201cWith rising demand and falling supply, landlords may respond by setting higher initial rents to compensate for the lack of future rental uplifts.<\/p>\n
\u201cThis could offset some of the intended benefit for tenants and may still leave affordability challenges for new or smaller businesses, in particular in the early days of the business when cashflow is often at its tightest.\u201d<\/p>\n
Andrews predicted that a shortage of rental stock and higher starting rents could push more businesses toward purchasing their own premises, rather than renting.<\/p>\n
However it could also prevent some potential businesses from entering the market altogether.<\/p>\n","protected":false},"excerpt":{"rendered":"
The inability to rely on upward-only rent reviews could discourage investment in commercial property, Holly Andrews, director and loans manager at redhill-based KisFinance, has warned. The government plans to ban upward only rent reviews in commercial leases, which means there will be the potential for rents to fall when reviewed. She said: \u201cFrom landlord and […]<\/p>\n","protected":false},"author":1,"featured_media":7625,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-7624","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-home"],"yoast_head":"\n