It is time for the Autumn Statement and according to many news outlets, we are hearing that this statement will include tax cuts for ordinary people. This is exciting after the fall in inflation figures 💸.
The COVID period up until now has seen record increases in rental prices in both commercial and residential properties for several reasons:
1. Record increases in demand. Due to COVID shutdowns, demand was artificially suppressed as viewings and inspections halted. Once activity resumed, pent up demand drove rents drastically higher, while supply remained largely unchanged as construction faced delays. These dynamics resulted in record rental increases. #RentalSurge
2. Historically high interest rates. Commercial real estate utilizes heavy debt leverage, even more so than residential. Rising debt costs have forced higher debt repayments, pressuring landlords to seek higher rents. #DebtCrunch
Why doesn’t easing inflation extend to commercial properties?
Firstly, despite cooling inflation, rate reductions aren’t expected until 2025.Also, commercial leases often have an upward only clause, especially in the drafting of rent review which only allow rental increases.
Landlords also utitlise various strategies to sustain high rents. High rents can directly impact business profits. In commercial deals, having experiential support is essential. Visit Olawill.co.uk to ensure you pay fair rents and secure favourable lease terms.
#commercialrealestate #smallbusiness #lease #landlords #rentreview