16/11/18
The biggest news from last week’s budget for many of our clients is the proposed introduction of a new retail relief for up to 90% of High Street properties.

The Chancellor promised to cut liabilities by a third on retail premises with a Rateable Value of up to £51,000 for two years from April 2019 and we understand that the definition of “retail property” will also include car showrooms, restaurants, coffee shops, pubs, bars, etc.

As always, the devil will be in the detail and our rating surveyor consultants will closely monitor progress on implementing the legislation to ensure that all of our qualifying clients benefit from the relief.

Other measures include a new taskforce with a £675m budget to regenerate High Streets nationwide and 100% relief for all stand-alone public lavatories.
16/11/18
The Staircase Tax is a complicated and ever-evolving area within Business Rates. It started with a case that rating surveyor consultant Paul Rabette took to Valuation Tribunal (and resoundingly won, we might add) back in 2010. The Lands Tribunal and the Court of Appeal agreed with the arguments that Paul originally put forward. However, unfortunately, the Supreme Court did not, leading to a landmark decision that introduced the Staircase Tax. This resulted in huge changes in the way that properties are assessed, with lots of occupiers nationwide seeing their properties “split” into multiple assessments – causing an administrative nightmare and often an increase in liability.

The new Act gained Royal Assent on 1 November and provides the opportunity to correct errors caused by the Supreme Court decision. It also allows our rating surveyors to revisit any cases where clients were advised not to appeal or where appeals were withdrawn based on the law as it stood. We can backdate as far as 1st April 2010. Our consultants have already compiled a list of clients that could benefit from this and will be submitting appeals shortly. If you think this may apply to you please contact kit.rabette@dayandbell.co.uk
02/10/18
In recent years Town Planning rules have been relaxed in many respects.

One of the most controversial issues has been the opening up of Permitted Development to convert offices and light industrial space to residential use.

Some commentators suggest this creates opportunities to reduce the dire housing shortage. On the other hand, traditional planning policy aimed to retain employment use on business space.




Day and Bell has been involved with a number of development schemes where office buildings are now apartments and industrial properties have become houses. The changing nature of commerce meant that that there was less requirement for offices in north London, but there are so few buildings remaining that occupiers struggle to find suitable premises. For industrial buildings, the situation is much worse, as manufacturing or storage and distribution businesses cannot find any suitable premises in many London suburbs.

Ultimately Permitted Development has created more sleepy suburbs, with less vibrancy and fewer employees visiting the shops at lunch time – providing further challenges to the vitality of High Streets.

London Borough of Barnet is looking at introducing an Article 4 Direction, where the Permitted Development in the Borough will be stopped. This restriction has been introduced in a number of other Council areas and it may help balance the future use of remaining business space, with housing.

On the other hand the reintroduction of intervention in the property market may seems at odds with the strongly Conservative doctrine of Barnet Councillors, who have privatised most services.

Day and Bell will follow the consultation and others may contribute on https://engage.barnet.gov.uk/ (when Barnet Council place it there). The deadline for comments is 12th November.
02/10/18

We are delighted to welcome Alex Jackson to the team as our newest Graduate Surveyor

Alex graduated from Oxford Brookes University in Summer 2018 and joined Day and Bell immediately in order to start working towards his APC, which he intends to sit in the second session of 2020.

Alex will be supporting the team in a range of professional work, focussing primarily on leasing and letting, landlord and tenant, and property management which will provide him with excellent APC experience.






20/09/18

We are delighted to welcome Anthony Di Maio to the team as our new Graduate Surveyor.

Anthony graduated from Oxford Brookes University in Summer 2017 following which he has been working for Savills at their Richmond HQ office.

He will be assisting with a range of professional work, mainly focussing on landlord & tenant, asset management and valuation instructions which will provide him with excellent APC experience.
13/09/18
The Headquarters of the Royal Institution of Chartered Surveyors is a grand old building at Great George Street, on Parliament Square. The balcony of the President’s Apartment is one of the best spots in London and the remainder of the building is quite spectacular, with its Victorian Gothic Revival design.

Perhaps we’re a little biased and have a vested interest, but if any members of the public wish to have a tour on Saturday 22nd September, please see these details below.

http://www.rics.org/uk/news/news-insight/news/rics-london-headquarters-to-open-doors-for-open-house-day
23/05/18
Iron Man Chartered Surveyor Ollie received news today that he has passed his Assessment of Professional Competence. After his strong commitment to professional work and many hours of revision, there was never any doubt. Day and Bell is very proud to welcome our new CHARTERED SURVEYOR into the fold.
26/04/18
After the first month of Minimum Energy Efficiency Standards (MEES) implementation, we’ve found the end of the world is not nigh! With some practical advice and limited expense, our clients have dealt with inadequate Energy Performance Certificate (EPC) ratings on their properties.

Lettings are now in hand and the new tenants will benefit from energy savings.


The implementation of MEES created some concerns and deliberation in the property industry. It was thought that some owners may be left with unlettable buildings, or major expenses for upgrading their premises. From 1st April this year, the MEES rules have meant that it is not generally legal to let commercial properties with an EPC rating less than A-E. It seemed much older stock, or other inefficient buildings, would stand empty unless improvements were made. This may not be the case.

We are dealing with a 2,800 sq ft industrial unit in central London, where a Lease Expiry was under discussion. Our provisional advice showed an EPC Rating of F. As there was no valid Certificate on the property, the MEES rules did not apply and we would have been free to complete the Lease Renewal. However, there was some initial fear that major investment would be required if the tenant left. This may have had an impact on the negotiating position of the Landlord – seeking a more modest rent to ensure the existing tenant renewed. However, our advice indicated that limited improvements to lighting could be made to upgrade energy efficiency and a conservative approach was not necessary. For business reasons, the tenant has chosen to vacate and with their co-operation, limited upgrading works have been carried out on behalf of the Landlord. At a cost of only £325 the EPC Rating was increased to Band E and a re-letting is now in hand.

An office unit in Barnet had an historic EPC Rating of F. A letting fell through in March and it appeared the premises could not now be let. Improvements have been carried out to lighting to gain a new EPC Rating of D and solicitors are instructed to let the property to a new business.

There is a school of thought that the MEES rules may change in the future to set the bar a little higher by requiring a Band D rating for new lettings. The work on the Barnet office has future proofed the property in this respect. If a Band D rating is required for the industrial unit we anticipate that only limited further expenditure will be required.

For further practical guidance on asset management and MEES, please email info@dayandbell.co.uk and we can endeavour to assist.


10/04/18
RICS has published some incredibly helpful guidance on the impact of Minimum Energy Efficiency Standards (MEES), which come into force on 1st April. This is their introduction:

“This insight paper provides an introduction to MEES and the potential impact of the regulations on UK property management and valuation. The scope and various exemptions of MEES for non-domestic and domestic properties is also discussed as well as advice for landlords.”

Previous guidance has been a little contradictory and practical advice from RICS helps deal with the implications of Energy Performance Certificate (EPC) and MEES rules. Some particular highlights of the paper are

1. NO NEED TO OBTAIN AN EPC ON LEASE RENEWALS
“Buildings that have yet to require an EPC under the original Energy Performance in Buildings Directive (EPBD) because they have not been marketed for sale or for a letting since April 2007 will also be out of scope until the time that an EPC is required.”

This means the MEES requirements to obtain an EPC and hold a Rating of A-E doesn’t apply to renewals of tenancies on properties that have never required an EPC. This is an important issue in considering lease expiry options at the end of long term tenancies.

2. CONTINUING LEASES
Continuing Domestic lettings will be required to comply with MEES (A-E EPC Rating) by April 2020 and continuing Non-Domestic lettings must comply by April 2023. When a property has not been required to hold an EPC, a further reprieve is found. The impact on residential letting is currently under consultation and the impact on the Buy-to-Let Market may be significant. Further consideration needs to be given to all commercial lettings.

3. EPC OBLIGATIONS
EPCs are valid for 10 years. As older EPCs (2008-2010) were often less stringent, there is a strong prospect that an E Rated property would now achieve a non-compliant F Rating. It is noted that there is no need to update the EPC unless a new letting or sale (See Definition) takes place. It follows that updated EPCs may not be required on lease renewal, although this doesn’t appear certain.

4. NO SCOPE FOR MEES ON SALES AND ASSIGNMENT
“Importantly, the regulations do not prevent the sale of buildings and do not affect the assignment of an existing lease…”

An EPC is required for a sale or lease assignment, but the Rating does not need to be within Band A-E for the transaction to take place. If an assigned Lease (after April 2007) is then renewed, then a Band A-E Rating will be required. There may be some interesting options arising from this issue.

Please obtain specific advice on your individual property before acting on these notes and we encourage you to read the RICS Insight paper:

http://www.rics.org/Global/MEES_impact_UK_property_insight_March_2018mr.pdf

Government guidance on EPCs is also helpful, especially:

“Transactions not considered to be a sale or rent
The purpose of providing an EPC during the sale or renting process is to enable potential buyers or tenants to consider the energy performance of a building as part of their investment. Not all transactions will be considered to be a sale or let to which the duties apply. These will include:
  • lease renewals or extensions
  • compulsory purchase orders
  • sales of shares in a company, which does not involve the sale of the building in which that company is located, where buildings remain in company ownership
  • lease surrenders
There may be other types of transaction that it might be argued do not require an EPC, for example, living accommodation at a workplace and tied to a job, or not-for-value transactions, but this will depend on the individual circumstances of any case.”

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/666186/A_guide_to_energy_performance_certificates_for_the_construction_sale_and_let_of_non-dwellings.pdf



16/03/18
Spring Statement 2018
The Chancellor has confirmed in this week’s Spring Statement that the next revaluation, currently due in 2022, will be brought forward to 2021, with the intention of moving to 3 yearly revaluations thereafter. This is welcome news for businesses as rateable values will be more akin to market rental values.

The government has also promised to maintain funding for the Valuation Office Agency (VOA) at the next Spending Review, which is essential if the rating system is to become more efficient.

The government also intends to stick to the current system of using rental values, rather than some form of self-assessment. This is very positive as most businesses understand rental values and the alternatives could have resulted in additional costs for occupiers.

2017 Rating List and Check Challenge Appeal
Almost a year into the new Check Challenge Appeal rating system and matters are still slow. A recent survey showed that 89% of users are dissatisfied. We continue to make representations through our own business and professional bodies to encourage improvements.

However I’m pleased to say that many of our clients have now registered their premises with the VOA’s Government Gateway using our Step-by-Step Guide. If you’ve not done this yet please get back to me so that we can start the process by sending you a draft Authority to Act to sign.

2010 Rateable Values
There is still a backlog of appeals against 2010 rateable values that are being processed by the VOA. If you still have outstanding appeals, we can assure you that we’ll continue to press your case for a resolution as soon as possible, and we will report back to you when things start to progress.

2018/19 Rates Bills
In the meantime you should be starting to receive your business rates bills for 2018/19. If you have not already done so please could you send us a copy to check they are in line with our expectations?

Our clients
Our clients range from smaller respected local companies to larger corporate businesses and institutions with a national profile, and we also act on a consultancy basis for property companies that do not have their own rating specialists. Over the last 10 years we have saved our clients £15 million and over 95% of our appeals are successful, resulting in average savings of £20,031.

Kit Rabette
Rating Surveyor Consultant for Day and Bell Surveyors Limited.

kit.rabbette@dayandbell.co.uk