Date: 10th December 2015
Regeneris Consulting have just completed a research project which examines the relationship between business rate changes and rental values. The report investigates whether it is occupiers or landlords who ultimately bear the burden of business rate changes, and the impact this has on the wider economy in terms of employment and development.
The final report launched today by the British Property Federation (BPF), British Council of Shopping Centers (BCSC) and British Council for Offices (BCO) concludes that over a period of two to three years, approximately three quarters of any increase in business rates are transferred to landlords in the form of a downward pressure on rents. The full report can be found here.
Using a practical example, this means than an increase of £100m in business rates per annum for three years would over the course of those three years lead to:
Ahead of the outcome of the Government’s review of business rates, the report highlights a number of policy implications. Regeneris concludes that revaluations need to be carried out more frequently in order to avoid uncertainty, more accurately reflect current economic conditions and reduce the capitalization of business rates into rental values.
Stephen Rosevear, Director at Regeneris Consulting, added: “The study has important messages for policy makers, investors and occupiers alike, not least of which is the very real impact rising business rates could have on employment and development. This was a complex, but important project cutting across many of our core business areas. It is an extensive work, built on the best available data and analytical techniques.”
If you would like to discuss this study or any of our other land & property work please contact Stephen Rosevear firstname.lastname@example.org.
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