Shocking warning over regeneration projects

Tuesday 30th June 2009

The commercial property market is facing a new threat, thanks to the forthcoming squeeze on regeneration funding from local councils.

According to the All Party Urban Development Group, the credit crunch and financial downturn will result in many projects not getting off the ground.

However, the parliamentary group, made up of MPs and Lords, also said that the crunch could be beaten through the use of US-style tax increment financing (TIF).

Chancellor of the exchequer Alistair Darling's Pre-Budget Report, scheduled to take place at the end of the year, was seen as a suitable venue for the new funding to be announced.

Successful regeneration of deprived areas has a direct impact on rents and prices of local offices and retail space, meaning that the projects have a direct impact on the commercial property market as a whole.

Clive Betts MP, group chairman, was quoted by Property Week as saying: "We must not allow this recession to prevent regeneration.

"Piloting new funding models like TIF could open up many doors to new financing that simply would not be available otherwise. And the Pre Budget Report is the place to do it."

The government is facing a £175 billion deficit in the public finances this year, with the high debts likely to lead to limits on public spending over the years to come. ADNFCR-1535-ID-19241933-ADNFCR