London Office Space occupiers face 50% increase in business rates

Commercial property companies say that occupiers in premium London office locations could face a doubling in property taxes in the next five years.  This could then lead to occupiers asking for cuts in the their rental prices as business rates per square foot could shoot from £25 to £50.  The values are based on capital values in April 2008.  Despite rental prices falling a massive 40% in areas of the West End, the rates will still increase, heaping further pressure on occupiers and agents.  For beleaguered West End agents, this is a real body blow, as occupiers will now be deterred from settling in premium London office locations.

The rate at the moment is 48.5%. On April 1 2010 the Valuation Office Agency will publish a report stating the values on non-residential buildings based on data from April 2008.  That period saw West End rents reach a peak of up to £115 per sq ft.  If this wasn’t enough of a headache for agents, there will also be a surcharge which has been ordered by the GLA to help pay for the £16 billion Crossrail project.  There will also be rate rises in other popular office areas such as Canary Wharf and the City, further hampering agents and occupiers.

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