Be aware of potentially expensive changes to the commercial property world this year…

If you own commercial property or you are a tenant, 2017 could be a busy and possibly expensive year. You need to be aware of changes that are in store and, if you can start, start preparing for them now.

(a)   Brexit and Article 50 are expected to be triggered by the Government at the end of March 2017 which coincides with the March quarter day and is likely to effect the amount of rent reviews.

We do not yet know how the market might react to Article 50. Some are predicating the market may plummet, at least in the short term. If this happens then Landlords could lose out at least this time around on a rent review. Preparing for this now and talking to your Landlord/Tenant would be good advice.

(b)   On 1^st April 2017, the revaluation of rateable values come into force. Business Rates are likely to increase quite substantially for many business occupiers. The maximum rise will be as high as 42% for properties that have risen sharply in value. It is likely this will have a big impact on smaller tenants, and some fear the increases may mean they will not be able to afford to continue to operate. Lobby groups are making action on business rates their priority demand to the Government in next month’s budget.

(c)   There are concerns and uncertainties as to how Landlords will respond to the phased withdrawal of mortgage interest relief and the increases in stamp duty land tax, and what impact this will have on developers and investors. The investor market has already been hit, but will it suffer even further in 2017? If you are developing now or planning to then this is something to consider.

(d)   A requirement to disclose in more detail the ownership of overseas companies owning land in the UK is likely to be introduced. The details are not known yet but with money laundering regulations also being tightened up, it is likely that disclosure of beneficial ownership will be looked at more closely – this might see a reduction in foreign property investment particularly into London.

If you would like to discuss any of the above issues in more detail please do not hesitate to contact one of our solicitors in the Commercial Property team here.