Local authorities could be missing out on business rates, due to conflicting approaches of landlords and tenants over the rising number of vacant shops in town centres.

Graham Chase, chair of the Association of Town Centre Management (ATCM), said void rates had continued to rise since the boom ended, and this was being exacerbated by the ‘mismatch' of views between landlords and tenants.

Speaking to delegates at the Local Government Association's ‘Helping our high streets' conference, he said: ‘Property has no value unless occupation is there.'

He claimed landlords were taking a short-term approach to filling empty retail units, while tenants were looking at the long-term.

Mr Chase, of Chase and Partners, explained some landlords were holding out for better times in order to strike long-term deals, while tenants wanted the security of lasting contracts to safeguard possible investments they might make to the properties. ‘High street voids are averaging about 12.5% because retailers have volatile balance sheets. The view that rental levels are never going down is wrong.'

He added that many landlords were willing to let for much lower prices, but only on very short-term deals, in order to avoid empty rates.

The Government removed reductions to the business rates Bill in April 2008 to provide an incentive to bring premises back into use. However, following the downturn, chancellor Alistair Darling stated in the 2008 pre-Budget report that empty properties with a rateable value of less than £15,000 would be exempt from business rates.

Next week, the ATCM will launch new guidance to local authorities to advise councils on carrying out economic assessments of their area. This will be a legal requirement for local authorities from April 2010.