Avison Young’s new report ‘Win, lose, or draw’ takes a look at how different sectors and regions across the UK will be affected by the 2021 rating revaluation.
Andrew Wellens, director at Avison Young in Bristol explains how the South West is likely to be affected.
Here in the South West we will see large swings in rate liability following the 2021 revaluation, with occupiers in some sectors seeing reductions, whereas others are likely to see their liabilities increase. In fact, the region overall will see a slight increase in liability across all sectors.
It is the retail sector however, that is likely to benefit the most, potentially seeing the largest reductions in rate liability, with the average reduction across the South West being 12.6%.
Andrew says, “Changing consumer habits and the increase in online retail have been major contributory factors to the decline in traditional retail on the high street, which is why retailers in some areas will see their rateable values fall and the High Streets of the South West are no exception.
“Retail occupiers across the South West are expected to benefit from an overall reduction in their rates bills of around £114.5million in the first year following the 2021 revaluation.
Avison Young warns however, that the retail sector is only likely to benefit from these reductions if the government scraps the controversial downward transition scheme. Andrew explains,
“The downward transition scheme has been contentious for many, it phases in reductions in rates liabilities year on year, and It has exacerbated the problems the retail sector faces. We estimate that the reintroduction of a downwards transitional scheme in 2021 would cost the retail sector between £1.5 to £2 billion, and call on the government to end this controversial scheme.”
While this would be good news for the high street, other sectors will face large increases in rate liability following the revaluation.
The strong growth in logistics and distribution warehousing in the South West is predicted to see the industrial sector experience an average 10% increase in rate liability.
Office occupiers also face an increase in rate liability following the revaluation with the average increase in liability across the region being 7.5%, although ratepayers in the strong central Bristol office market could see increases of over 25%.