Insider Media Limited

Every month, Insider invites readers of its daily newsletter to submit their questions about commercial property to top professionals in the Yorkshire region.

This month, Henrie Westlake, partner at Knight Frank, has been answering your questions.

All answers are for general guidance only. Each case must be handled on the individual facts.

Q: I own a substantial residential property and with the current economic difficulties I am contemplating working from home with a couple of colleagues on a much more regular basis. Will I need to apply for a change of use and will business rates be applicable?

A: “This is a slightly grey area as there is no specific rule, it is open to interpretation and each case is judged on its own merits. The best course of action is to always check with the local planning authority.

"The use of just one room for an office is usually classed as "incidental" to the use of the dwelling and planning permission should not be required. However, if you are “materially changing” the use of the dwelling you are likely to need planning permission.

"Your note advises that there will be a couple of employees also working from the dwelling. The generation of non-residential visitors, traffic, noise etc over and above what you would expect from a single dwelling will increase the likelihood of a requirement for change of use.

"A change of use will in turn will lead to a business rates assessment and liability on the property.

"Another point to consider is if the property is subject to a mortgage, please ensure that you check with your lender that such use is compatible with the terms of a domestic mortgage.”

Q: I operate in the buy-to-let market; but am weighing up releasing capital through the sale of some properties in my portfolio; has Knight Frank noticed any upward trend in the residential market since the stamp duty suspension?

A: “There are currently a huge number of factors influencing the property market and as such it is very difficult to identify the impact of a measure such as the Stamp Duty Exemption in isolation. In theory, a reduction in purchaser’s costs must help to assist the market, however it is questionable whether this will act as the deciding factor as to whether to proceed with a purchase and at what level.

"Sales volumes have fallen as the election approaches and it is only when the dust has settled following the election that it will be possible to an accurate assessment of the market.

"As a general view, it is likely that interest rates will remain low into the medium term and there is a view that this combined with a lack of supply will lead to further capital growth.”

Q: I have several commercial properties in the Bradford area which are currently unoccupied and I am extremely disappointed I have to pay tax in respect of these premises. Each of the properties is valued in the region of £500,000, so the benefit of the available exemption is minimal, and I would be grateful if you could explain whether there is any way I can avoid paying up, or minimising my exposure?

A: “There are a number of options to help to mitigate the rates payable for vacant properties. Set out below are details of two of the more successful options:-

"Intermittent Occupation; once a property becomes vacant an initial three month (six month on industrial) empty rates relief period is applied. Where companies have a genuine need for storage, we suggest they re-occupy the empty properties with archives/goods. Once the minimal period of beneficial occupation is established with the local authority, the premises can be vacated. If implemented correctly, a further three month void period will be applied.

"Secondly, Charitable Relief; Charities are increasingly being sought as good temporary tenants. Charities benefit from 80 per cent mandatory relief and have been successful in implementing rates saving schemes. Charities are often willing to occupy premises on a short term basis until a tenant can be found.”