Mayfair business rates could rise 90%
July 2nd, 2009 | by Amy Edwards
Business rates in the centre on 
London are set to increase by a whopping 90%, causing financial worries for occupiers as well as landlords. Under recent government legislation, landlords will have to pay the full rate on empty buildings after to abolition of the empty rate relief. Already coping with falling rents and sluggish demand, agents and landlords in London will be hugely concerned about future prospects.
According to CBRE, the autumn’s rating revaluation, prestigious London areas such as Mayfair could see rates rise as much as 90%. Over the next five years business rates per square foot could reach £46, which is more than it costs to rent office space in some City areas. The outdated calculation that the valuations office use is based on office rental growth for the years 2003 to 2008 – basically the boom years when rents spiraled over £110 per square foot as private equity companies spent lavishly on premier office space. But since then, rents have come tumbling down by as much as fifty percent. The West End will take the brunt of the new rate increases, but other areas will still have to withstand increases of between 10 and 15%
Andy Teacher from the British Property Federation, who has been lobbying on behalf of those with a vested interest, confirmed that the goverrnment would not making any changes to the legislation. This is not surprising given that we have a cash strapped treasury desperate to collect every penny it can in taxation.
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