Overview

Compiled list rateable values were published for commercial properties in England and Wales on 1 April 2023. Given significant fluctuation in rental values since the last revaluation in 2017, many businesses in London face strong increases to their rates liabilities. Ratepayers of office and industrial properties can expect to see moderate or significant increases, while retail properties are set to benefit most.

With the business rates multiplier again being frozen, change in rateable value from 1 April 2023 will to a certain extent determine the impact of the revaluation on each individual property.

Via the three maps below, LSH has identified the ‘winners and losers’ of the latest revaluation for the office, industrial and retail sectors across London’s 32 boroughs and the City of London.

Who is set to benefit?

Ratepayers in the office and industrial sectors are set to pay more, whereas those in the retail sector will typically benefit from the revaluation. Hastened by the impact of the pandemic, this contrasting pattern reflects marked structural shifts across the property markets in recent years.

Due to change in requirements for office space, with underlying demand for quality, along with trends towards differing formats and breakout areas, there has been growth in some parts of the market along with slight stagnation in others. The accelerated shift to ecommerce among consumers has had the affect of driving up rents in the tightly supplied industrial and logistics sector. While weaker demand on the high street has led to a widescale rebasing of retail rents across much of the capital.

Office

• Largest average increase in rateable value: Kingston Upon Thames (27.3%)
• Biggest average decrease in rateable value: Islington (- 3.5%)
• Average increase in rateable value: 11.3%

The office sector within Inner and Outer London has seen an average increase in value of 11.3%, although properties located in some boroughs will see a rise of greater than 20% on average.

Office Average RV Change % 

Notes: Right click or toggle to zoom in. If map values are not being displayed, delete cache from your browser.

Source: VOA

Industrial

• Largest average increase in rateable value: Southwark (64.8%)
• Lowest average increase in rateable value: City of London (0.9%)
• Average increase in rateable value: 32.2%

In the London region many industrials have seen their rateable value significantly increase from 1 April, in a number of instances greater than 40% on average. Albeit note that increases in liability are to be capped in the first year of the rating list to 30%, thanks to the government’s transitional relief scheme.

Industrial Average RV Change %

Notes: Right click or toggle to zoom in. If map values are not being displayed, delete cache from your browser.

Source: VOA

Retail

• Largest average increase in rateable value: Redbridge (12.3%)
• Biggest average decrease in rateable value: Kensington and Chelsea (-23.2%)
• Average decrease in rateable value: -3.6%
  

On average the retail sector in London will experience a reduction in rateable value. In addition, in 2023/24, the Retail, Hospitality and Leisure Business Rates Relief Scheme will provide eligible and occupied retail, hospitality and leisure properties with a 75% relief, up to a cash cap limit of £110,000 per business.

Retail Average RV Change %

Notes: Right click or toggle to zoom in. If map values are not being displayed, delete cache from your browser.

Source: VOA

These figures are useful in identifying the impact across London's office, industrial and retail sectors, however, it should be remembered that each individual property will have its own unique valuation, which may buck regional trends. It is therefore essential that professional advice is taken to ensure that 2023 rating list rateable values are not excessive and to identity potential opportunities to minimise liability.

For more information, e-mail rating@lsh.co.uk or visit our Business Rates page. 

The data shown in this article has been extracted from the Valuation Office Agency’s (VOA) non-domestic rating statistics published in May 2023 and are based on the average changes in rateable values within each of London’s 33 administrative areas. 

Individual properties may experience greater increases or decreases in value than the average figure shown for the area in which they are located. The extent of change in rateable value will depend on many different factors and even if you are located in an area where rateable values have fallen on average, it is important to have your assessment(s) verified, as there may still be opportunities to secure further reductions.