The government’s decision to abolish rate relief on empty property is “irresponsible” and will stifle regeneration in deprived areas, according to the British Property Federation.

The BPF was responding to the Rating (Empty Property) Act 2007, which will reduce the empty property relief rate from 50% to 0 from 1 April 2008. This, said the BPF, would damage speculative development, imposing a severe burden on businesses and harming their expansion prospects.

The BPF believes that the empty property rate relief had encouraged landlords to develop property in run-down areas, playing a critical role in regeneration, and this will now suffer. It said that the government had “wholly misunderstood and underestimated the detrimental effects” of the Act.

Liz Peace, chief executive of the BPF, said: “We are disappointed that, despite all the Prime Minister’s talk of open government, there has been no real consultation on the principle of this reform. We believe it to be an ill-conceived move that will not only be a blow to business, but stifle much needed regeneration of some of England’s poorest communities.”