Retail, hospitality and leisure firms have been handed a 50% business rates discount by the Chancellor in his autumn budget. But the property industry awaits confirmation that this extends to high street estate and letting agent branches.

Rishi Sunak told MPs that those hardest hit by the pandemic would be eligible to claim a discount on their bill for one year, from 2022-23, up to a maximum of £110,000.

While it wasn’t the drastic announcement that some might have hoped, the government promised that its reforms would, “ease the burden and create stronger high streets”.

Estate and lettings agencies were included in the business rates relief introduced due to Covid and there is no indication that they won’t be included again.

Sunak promised to make the business rates system fairer and timelier with more frequent re-evaluations every three years, rather than every five, starting in 2023. Next year’s planned increase in the multiplier will be cancelled for a second year; from 1st April 2022 until 31st March 2023, keeping the multipliers at 49.9p and 51.2p.

Green measures

The Chancellor also announced a new business rates improvement relief to encourage companies to adopt green technologies such as solar panels. From 2023, firms can make property improvements and pay no extra business rates for 12 months. He said this relief, totalling £750 million, would make a difference: “Without action, millions of businesses would see their tax bills going up next year because of inflation.”

Sunak said that apart from Covid relief, the total business rates cut of £7 billion added up to the biggest single year tax cut to business rates in over 30 years – and the industry has reacted favourably to his announcement. Winkworth chief executive Dominic Agace says: “It is really positive news to see business rates are being cut by 50% to help local retailers compete with their online only peers. This initiative will help to ensure that we have thriving local communities.”

Tomer Aboody, director of property lender MT Finance, adds: “Fairer and lower business rates for the high street from 2023 are extremely welcome. This should increase the productivity of local high streets, encouraging more shops and therefore more employment, as well as keeping communities together by persuading people to shop locally.”

Propertymark reaction

Mike Hughes, NAEA Propertymark Commercial Board Member, says: “The commercial property market should welcome the Chancellor’s comments relating to business rates announced in today’s Autumn Budget.

“Most retail, hospitality, and leisure businesses are still fighting hard to get back on an even keel following the COVID-19 pandemic and so the certainty of continued business rates relief for these sectors is a great help. This will aid those business owners and investors looking to prepare their properties for sale and give purchasers the confidence to progress with acquisitions.

“The introduction of three yearly business rate revaluation in 2023 will help to flatten the peaks and troughs that the previous valuation time scale created.

“The business rates exemptions for green property improvements will benefit and enhance the quality of business property stock at a time where the environmental benefits of premises are seen as crucial to their sustainability by much of the financial industry.

“Finding a way to taper the benefits of all these announcements following 2023 may be difficult, but the Chancellor has given us hope for the growth in the commercial property market with this budget.”