United Kingdom
November 2009
We pride ourselves on keeping you up-to-date with the latest news from the real estate
and construction industry. 'The real issues' does just that.
Welcome to the latest edition of The Real Issues.
In this current edition we consider:
- Comment upon the Community Infrastructure Levy
- Consider the impact of the 2010 Rating Revaluation
- Revisit the thorny issue of corporate residence in the light of Laerstate BV v HMRC
- Review the state of the European Office Markets
Although we are seeing some increase in transactional activity there are a number of commercial factors that are causing particular difficulty. These include a dearth of available real estate, a lack of long term bank finance and real uncertainty as to how banks will rebuild their balance sheets and attend to their "problem loans".
It is a sobering thought that of the four principal UK banking groups, two are largely in state ownership and their real estate assets are a multiple of the next largest bank. An extraordinary level of public support was necessary in order to obviate a wider crisis but this support was only ever intended to be a short term crisis measure and not a new structural feature of the UK banking system. The announcement today of the break up of two of the High Street banks must be welcomed, but until all the banks actively start taking steps to put their houses in order, real estate markets will have a certain artificiality about them and this feature will not inspire confidence amongst investors.
We trust that you will find the current edition of The Real Issues interesting reading – should you have any comments in relation to any of the points made please do not hesitate to contact either your usual BDO adviser or me.