Source – British Property Federation

Details released by the government on the effects of the 2010 rating revaluation is misleading, according to the latest research published by BNP Paribas Real Estate.

The government states that there will be modest shifts in liability across England, ranging from -7% decreases to a rise of just 5% across all regions and sectors.

BNP Paribas Real Estate’s research, however, demonstrates that this is a very macroeconomic outlook which may result in unrealistic expectations from the revaluation by ratepayers.

Mike Flecknoe, Senior Rating Director at BNP Paribas Real Estate, explains: “It is very misleading to present a macroeconomic view that there will be ‘nominal’ changes for business ratepayers following the 2010 revaluation. It is easy to show this view if you take an average of all properties across England. However, realistically, there will be both winners and some significant losers when you examine different sectors of properties in different regions in England. Once you delve a bit deeper, the shifts can be quite dramatic and in our sample we highlight falls of just over 2% but increases of up to 25%.”

The research covers various office, retail, industrial and other specialist property types in six regions: Greater London, South/South East, West/South Wales, Midlands, North East, North West and Scotland. It looks at the ratepayer’s likely liability, the amount they will have to pay, rather than just the rateable value which most market commentary has thus far been focused on.

The research highlights Mayfair offices as the biggest loser, seeing a rise of about 25% in their rates bills next year, once you factor in the Crossrail levy and the rise in the rateable value of such prime buildings. However, subsequent rises of 19%, 21% and 10% in the second, third and fourth years after the revaluation will also mean that over a four year period, ratepayers of Mayfair offices could see their rates bill double.