Member Article

Office occupiers might face 50% rates increase

Occupiers of Grade A office stock may see rates bills increase by as much as 50% in the 2017 revaluation, according to national commercial property consultancy, Lambert Smith Hampton (LSH).

This is one of the possible outcomes of the government’s policy on the rating of empty property since 2008. The policy has acted as a disincentive to speculative development, resulting in a dearth of new supply, and the postponement of the revaluation.

Those locations where demand for Grade A office stock outstrips supply are predicted to suffer disproportionate increases in Rateable Value, when compared to locations experiencing more subdued rental increases.

Chris Wilkinson, senior surveyor at LSH in Newcastle, said: “Occupiers of property in emerging hotspots such as Cardiff, Manchester and central London may experience disproportionately high increases in rate liability at the 2017 revaluation. That could be enough to dampen the economy at its most critical moment.”

The government’s announcement of an 18 month exemption from rates for new build properties which enter the rating list between October 1 2013 and 30 September 2016 has been roundly criticised as insignificant for the majority of new build developments.

Chris added: “An urgent rethink is required to motivate developers, kick-start development and mitigate some of the skewed effects of a supply/demand cycle which is now out of sync.”

This was posted in Bdaily's Members' News section by Lambert Smith Hampton .