As uncertainty around the Brexit ‘deal’ continues, could it represent an opportunity for businesses to challenge their rateable values?
The future of Brexit remains uncertain, as Government continues its attempt to resolve the Irish Backstop issue.
If the Government fails to get cross party agreement to adopt Theresa May’s ‘deal’ by the 29th March, will we simply crash out with no deal?
The PM is fighting harder than ever to ensure this doesn’t happen, but the EU doesn’t look like budging any time soon.
If we do crash out without a deal, could this lead to a sudden catastrophic drop of property demand, consumer confidence and commercial property values – both rental and capital values?
It’s certainly possible.
With this in mind, is there an opportunity for businesses to challenge their rate assessments because of a Material Change in Circumstance (MCC)?
Although economic factors are disregarded for rating valuation purposes, other physical factors such as less demand and over supply of vacant available properties could count.
As expert rating surveyors, it has not escaped our notice that the Brexit date also coincides with the Antecedent Valuation Date (1 April 2019) for the next Revaluation in 2021.
Failure to hammer out a deal by the 29th could have a direct impact on rateable values, which would represent an opportunity for businesses to claw something back from this Brexit mire.
So, how might Brexit contribute towards a MCC in, say, offices?
Currently, there is an overall shortage of skills within the high-spec technology, data science and many service sectors.
If investment in the UK dries up from the EU, we could see a significant negative impact on the property requirements of all of the above sectors, especially if the trade and immigration barriers come down, creating a potential oversupply of superfluous office and R&D premises post Brexit – deal or no deal.
Indeed, a fall in workers has already been felt industry-wide, with specialist technology recruitment firm, Gordon & Eden, reporting a 40 percent drop in applications from EU citizens.
It seems convincing national and international candidates to consider roles here, despite Westminster’s attempts to tell the world that we’re ‘just fine on our own’, no longer works – we’re just too risky a bet.
Not only this, a combination of Brexit and already tightly squeezed personal finances is putting pressure on the UK economy and
could even signal a recession is on the way, if the latest data from the Insolvency Service is anything to go by.
The number of UK companies entering into insolvency is on the rise, reaching its highest levels since 2014, and retail insolvencies have risen by 9%.
The data paints a grim picture for the retail industry, as UK shops endured the worst Christmas in a decade, with sales flatlining.
Uncertainty around Brexit and the future EU-UK trading relationship is already forcing businesses to hold off on investment decisions, again affecting their suppliers and customer networks.
The longer we continue without an agreed deal, the more uncertainty and disruption will occur as we head off into the unknown.
The question is, does this represent an opportunity for businesses to challenge their rateable values?
For now, the jury’s out, but time will tell.
For help or advice in relation to your business rates needs, don’t hesitate to get in touch.