Northern winners but wealthy south set to lose out in revaluation
The chickens are finally coming home to roost for retailers in some of the wealthiest shopping areas of London after they have enjoyed artificially low business rates for the last two years.
For those retailers which have enjoyed the postponement of the revaluation of Business Rates across England, reports now say that following the 2017 revaluation the Uniform Business Rate (UBR) in England applied to ratepayers' rates bills is likely to be set at 50p in the £ – the highest level yet, and equivalent to 50% of the current rental value of a property.
That would mean a very healthy £26bn in tax revenue for whichever Party takes over Westminster next month.
The 2015 revaluation was postponed by the Government, which has added the effect of an extra two years of rental growth to be taken into consideration. This means that assessments following the 2017 revaluation will be higher than if it had taken place this year.
The predicted 50p in the £ comes various sources which estimates that the total rateable value across the country will be more or less static, unlike past revaluations, which have always seen an overall increase.
It's likely that those most affected will be large corporates with big portfolios heavily focused on London offices and retail, or landlords/occupiers with just one or just a few large properties in areas where rental values have increased significantly since April 2008, the valuation date of the last revaluation.
The losers, unsurprisingly, are forecast to be mostly London-based where values recovered quickly from the recession and, particularly in new emerging submarkets or City towers offices hitting new heights. King's Cross is looking at a 79% rental value increase and City or Southbank towers up to 50%. Luxury retail on Bond Street is looking at 60% rises whereas retail property on Oxford Street could see rises of 40%.
But before you start to feel sorry for them, don't forget some have already saved millions in business rates thanks to the postponement and they always knew there was going to be a day of reckoning and should have planned accordingly.
On the plus side, there could be some notable business winners in the North. Predictions are that retail in Leeds will see a drop of 40% and offices in Sheffield (-20%) and Newcastle (-15%).
Other winners could be retail in Cardiff (-15%), Glasgow retail (-30%) and industrial (-15%); Newcastle retail (-15%) and Birmingham offices (-10%).
Watch this space.
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