Posted on 01 February 2017.
For the last six or seven months, two stories have dominated the papers: Brexit and Trump. Endless discussions over the merits and drawbacks of a hard or soft Brexit, debates over the exact nature of Theresa May’s plans and the impact on business seem to show an endless vista of uncertainty.
When you add to this the hype around Trump’s election to the US Presidency and speculation over the effects on the world economy, you’d be forgiven for sinking to the depths of doom and gloom.
But as so often is the case with press hype, the reality on the ground is often quite different.
Certainly in our local Northamptonshire area, the demand for business space is actually looking pretty strong. A combination of improving demand combined with a dearth of new development through the recession has seen the vacancy levels in 2016 fall across all sectors.
This is particularly the case in the industrial/ warehousing sector. One of our clients holds within its portfolio a development of small good quality business units on the Moulton Park Industrial Estate. At 1,000 and 2,000 square feet, it’s serving the small business and start-up end of the market.
Historically, the development has always been a good indicator of the mood of the economy as a whole and currently the scheme is fully occupied. Over the past few months, we negotiated a series of deals to welcome a host of new tenants including Briton Building and Services Ltd, Vale Engineering, Ace Services Ltd, Precision Signs Ltd, Baltic Bakery Ltd and Inan Catering Ltd.
Rentals on this scheme have increased significantly from the dark days of the recession and are now beyond those enjoyed back in 2007. So that’s good news for landlords and whilst it would be immediately assumed that it’s bad news for tenants, there is a very significant change to small business rates relief coming into force from 01 April this year which will undoubtedly have a significant impact on the finances and profitability of small business and start-up operations.
Essentially from 01 April 2017, small business rate relief will permanently double from 50% to 100% along with a significant increase in the thresholds to benefit a greater number of businesses.
Businesses occupying property that has a rateable value of £12,000 or below will receive 100% relief. Businesses with a property having a rateable value between £12,000 - £15,000 will receive tapered relief. The government anticipates that 600,000 small businesses, occupying effectively a third of all properties, will pay no business rates at all – a saving worth up to £5,900 in the 2017-2018 period. An additional 50,000 businesses will benefit from the tapered relief.
Also in the same announcement, the government increased the threshold for the standard business rates multiplier up to a rateable value of £51,000 taking a further 250,000 smaller properties out of the higher rate multiplier. This will reduce business rates for many small businesses, including a number of high street shops.
Business Rates Assessments have become an increasingly contentious issue and with every re-valuation, where there are winners there are also losers!
But this current re-valuation has been surprisingly favourable to Northamptonshire.
There is further information on the practicalities of the re-assessment and the appeals process in our fact sheet here.
As always, we are available to offer initial advice on all property related issues including valuation work, rent reviews and lease renewals and commercial agency (sales and lettings).
And finally, if there’s any doubt over the Northampton market, you only need to read about our International Deal of the Year to realise that Northamptonshire can even steal a march on San Francisco!
Wishing you all the best for a successful 2017.