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A GOOD END TO THE YEAR – WHAT’S IN STORE FOR 2017?

As we prepare for Christmas and recovering from the shock result in the US time to look back at the year and to look forward to what we will all face in 2017

This year has been a story of good, bad, good, bad and all well at the end of the year – market has settled sales are good. On the commercial front another year of ups and downs but more up. Level of enquiries has improved and the conversion to sales of land and commercial property is up. Retail lettings also improved and the appetite for development land is unabated at the right price. Developers still not taking any huge risks and funders, although lending, continue to be nervous unless the sites are prime.

An important event for businesses next year is the overhaul of the business rating system. From 30 September 2016 anyone in England and Wales who pays business rates can go online to check their new draft rateable value. From this they can get an estimate of what their business rates will be from April 2017.

It only takes a couple of minutes to click, find and review a rateable value. If a ratepayer thinks the information held about their property is incorrect, you can ask to have your records amended.

The Rateable Value (RV) of a property is the first element in the calculation of the rates bill. Until the current 2010 Rating List, revaluations took place every 5 years, however, in October 2012 the coalition Government announced that the revaluation was to be postponed for 2 years with the new list coming into effect from 1st April 2017. Revaluations are carried out by the Valuation Office Agency (VOA) which is an executive agency of HM Revenue and Customs. The valuation office has recently revalued all 1.96 million non-domestic properties in England and Wales. The RV of a property reflects the annual rent that it could have been let for on the open market at 1st April 2015.

The second element in the rates bill is the multiplier, the Uniform Business Rate (UBR), expressed in pence per pound, currently 48.4p for small businesses. This is set by the UK Government for England and the National Assembly for Wales. In each financial year, the UBR may be raised by a maximum of the inflation rate of the Retail Price Index (RPI) from the previous September. The basic business rate liability for a property is calculated by multiplying the RV of the property by the multiplier

Business rate relief is available for businesses in a wide range of circumstances, with criteria including the nature of their business, its size or location.

Changing business circumstances can lead to business rate reliefs becoming available at various stages. These often include moving to a rural environment, or owning an empty property that once housed the business.

The rules surrounding small business rate relief are straightforward at first glance, but various opportunities for claiming exist around the basic criteria of the property’s rateable value.

Even if a business does not appear to qualify for this relief, we may be able to identify grounds for a part-reduction.

From April 2017, all properties with an RV of less than £18,000 will have their bill calculated using the small (i.e. lower) business rate multiplier, providing the property is occupied.

For rateable values between £1 – £5,999 – Businesses receive 100% relief on the amount payable – this will increase to £12,000 in April 2017.

As of April 2008, 100% business rates are due on commercial properties that have been empty for three months or more, or six months in the case of industrial and warehouse properties. The threshold at which empty property currently becomes liable for business rates is RV £2,600.

Qualifying unoccupied newly built properties are exempt from empty rates for up to 18 months (up to state aid limits) where the property is entered into the rating list between 1st October 2013 and 30th September 2016.

Bank of England Summary of Business Conditions for November 2016 reports business sentiment had recovered further from its post-referendum fall, but remained relatively fragile alongside significant uncertainty around the longer-term outlook. Activity growth had remained resilient. A survey pointed to broadly stable or slightly lower investment spending over the coming twelve months, with uncertainty concerning future demand and trading arrangements expected to drag on spending.

Investor demand for UK commercial real estate had continued to recover although sentiment remained fragile and transactions remained low by historical comparison. Rents had continued to rise in many parts of the United Kingdom.

Housing market activity had recovered since the weakness seen in the immediate aftermath of the referendum, but the extent of the pickup was variable across regions and price brackets.

Values both for commercial and residential remained relatively static with signs of modest increase in certain areas. To ensure you maximise your assets professional advice should be taken to undertake either a formal valuation or a free property health check.

Well the end of the year is a positive time for the markets lets hop 2017 moves us forward – Happy Xmas and a prosperous New Year.

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