Many are calling for reform of the dysfunctional business rates system.
As we speak, many are calling for reform of the dysfunctional business rates system as many high street assets are left empty. It’s more of a concern if you have a restaurant for sale.
In this article, we’ll reveal that the clout to change the system sits with local councils and that only the most proactive, savvy restaurant landlords will cut through the red tape.
According to a leading piece of research by insolvency firm Begbies Traynor, the number of firms suffering “significant financial distress” in London is up 17%. This is leading to an increase in the amount of nationwide high-street property sitting unused.
Why? Many businesses simply can’t afford the ever-growing rent prices charged in London (and indeed across the southeast), and this has led to a mini exodus across many of the local high streets across the capital.
Usually, empty assets would be acquired by other businesses looking to expand throughout the capital, but under present circumstances, the prospect of having to pay business rates is preventing upcoming buyers from signing contracts.
Staggeringly, at this point, there are 10,499 shops that have been empty for over three years, according to the Local Data Company.
Business rates have to be paid on all commercial properties including pubs and restaurants. This means that many prospective buyers of restaurant and leisure property could be shying away from some attractive assets.
At present, there’s only one way to get around paying business rates. That’s to wait until the asset has been empty for over three years, at which point the landlord can appeal to the Valuation Office Agency to have business rates removed. There you have it.
A top-down approach to resolving this problem could be for the business rates policy to be repealed or reformed. Unfortunately, that doesn’t look likely to happen in the foreseeable future.
A bottom-up approach where landlords tackle the situation head-on will result in a sale of their property. Here at Restaurant Property, we can bring to the table years of accumulated knowledge, thorough planning and hands-on sales tactics to deliver you a sale to the highest bidder.
Although business rates are a problem for many sellers, in partnership with you, we will devise and deliver a strategy that brings multiple bidders to the table.
Ultimately, business rates are causing issues for London’s high streets, but proactive landlords that seek the help of restaurant estate agents like Restaurant Property will flourish.
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