On the 1st April 2023, the new rating list went live and reflects the changes in the property rental market from April 2017 to April 2021.
The purpose of the revaluation is to ensure that those who have gained most from the economy over this period will bear the greater charge from April next year. It is evident that some sectors, such as retail, may well see substantial reductions to reflect the increase in online sales over this period whilst conversely the industrial sector could see the opposite for the same reasons.
At Knight Frank we have used our extensive market knowledge to carry out a series of research articles across the various sectors. These will inform businesses of not only the likely changes to their sectors but also provide an insight into other important changes to the rating system. For ease, these will all be published on this page over the next few months and we would recommend ensuring you bookmark this or email us to subscribe to our bulletins rating@knightfrank.com.
London Offices Heat Map | England and Wales Industrials Heat Map | Impact on Retail | Proposed New Obligations and Penalties for Ratepayers
Estimated changes in rates payable
London Offices Heat Map
In order to illustrate the impact on the office sector, we have compiled a ‘heat map’ of the 20 Central London sub-markets. The Rates Payable for 2022-23 have been compared to the projected Rates Payable following the revaluation in 2023-24.
Key points to consider:
- Average Increase: 7.5% (all sub-markets)
- Biggest increase: 16% White City / Bloomsbury
- Biggest decrease: -10% Canary Wharf
England and Wales Industrials Heat Map
In order to illustrate the impact on the industrial sector, we have compiled a ‘heat map’ of 10 regions (within England and Wales). The rates payable for 2022-23 have been compared to the rates payable following the revaluation in 2023-24 and 2024/25.
Key points to consider
- Average Increase: 34% (all sub-markets)
- Biggest increase: 55% London
- The increases are underpinned by the strong rental growth in the industrial sector
How will Retail be impacted?
We have completed detailed research on the following retail questions:
- Will the London Retail market benefit from this revaluation?
- Will UK (England) Shopping Centres benefit from this revaluation?
We have compared the changes in Zone A (the applied rate/value) between the 2017 list and 2023 List, which outlines on the whole a significant contraction and reduction in the 2023 list. There are however several pockets where the values have increased in both the London and Shopping Centre Markets.
Additionally, the Retail sector will be further helped by the Autumn Budget announcements:
- The multiplier being frozen instead of increasing;
- No downwards transition, so the full benefit of the reduction will be felt from day 1 of the new list; and
- 75% relief for retailers next year, subject to a cap per business of £110,000.
IMPACT ON ZONE A £ / m2 - CENTRAL LONDON RETAIL MARKET
IMPACT ON ZONE A £ / m2 - NATIONAL SHOPPING CENTRE MARKET
Proposed New Obligations and Penalties for Ratepayers
The reforms being introduced as part of the Government’s fundamental reform of the system will include a number of mandatory obligations on all businesses even for those who currently pay no business rates. These measures come with strict penalties for non-compliance. It is therefore important businesses are aware of these changes and penalties before their introduction in 2023. To assist we set out the current proposed measures on the table below. The Government has indicated that it will consider further consultation on these obligations and we will issue further information should this happen.
How Knight Frank can help you?
As one of the leading specialist teams in this sector, we offer a full rates management service which will ensure that this costly overhead is mitigated at every stage.