· Aggregate rateable values are set to rise by 11.4% in England
· Retail sector is set to be the biggest winner, with prime offices offsetting discounts
· Logistics & Industrial premises facing the biggest shock to existing values
Cushman & Wakefield has released its latest modelling ahead of the 2026 business rates revaluation, revealing a significant redistribution of liability across sectors and regions. Based on rental values as of 1 April 2024, the revaluation will come into effect on 1 April 2026 and will have a material impact on occupiers and investors throughout the UK.
According to Cushman & Wakefield’s calculations, total rateable values will increase significantly across the UK with aggregate rateable values in England set to rise on average by 11.4% to £79.9 billion, led by the logistics & industrial sector (28.64%). In Scotland rateable values are expected to rise by 10.45% to £8.2 billion. Meanwhile, Wales faces a rise of 5.38% to £2.8 billion.
Mike Flecknoe, Head of Rating UK at Cushman & Wakefield, said: “The 2026 revaluation reflects a market that has evolved considerably since the last cycle. Our analysis shows that while some occupiers will benefit from reductions, others – particularly in prime office and logistics locations – should prepare for substantial increases.”
An increase in rateable value does not necessarily translate to higher liability, as this also depends on what multiplier is applicable – with these also set to change in April. According to Cushman & Wakefield’s calculations, discounted multipliers for qualifying retail, hospitality and leisure ratepayers in England (the RHL Multiplier) will result in a £2.17 billion revenue shortfall for the government. This will be paid for by the c.20,000 properties in other sectors whose rateable value will be £500,000 or above and therefore impacted by a new High Multiplier.
In this scenario, the Office sector will make up much the shortfall as the 5,300 properties that qualify for the Higher Multiplier will need to pay an additional £537 million in annual liabilities. The Industrial sector follows with 3,800 properties paying £267 million, and 2,000 properties in Logistics paying £260 million.
Offices
London offices with rateable values over £500,000, and therefore qualifying for the new Higher Multiplier, will see increases in all but three districts. Projected liability increases in Kensington (53.5%), Mayfair, St James’s and West End (45.71%) set to be amongst the highest in the country, driven by strong rental
For immediate release
performance and limited supply. Offices below £500,000 will experience more modest uplifts thanks to the lower Standard Multiplier that would be applied.
Outside London, the liability impact for lower value office properties is relatively modest, offset by the lower Standard Multiplier. Leeds faces the lowest liability increase of 2.48% and Reading faces the highest at 10.77%. However, for higher value properties, the Higher Multiplier means that Reading, Birmingham and Bristol will experience increases of more than 20%, reflecting resilient demand and rental growth in those cities.
Retail
Conversely, for Retail the combination of lower Zone A values on average and discounted RHL Multipliers means much of the sector will have a double benefit, leading to significant liability falls in 2026-27 even in prime Central London. For example, even the smallest projected liability falls of 27.72% in Oxford St West and 27.82% in Regent Street will still be significant. Applying the High Multiplier has little adverse impact, the highest being a small rise in Kensington of 4%, the next being Oxford Street West at just 0.29%.
It is a similar story outside London. In England the highest liability falls will be in Nottingham (33.74%), Leeds (31.24%) and Newcastle (30.3%). Where the Higher Multiplier is added, the Zone A liability changes are a little more mixed, with Birmingham (9.93%), Oxford (6.15%) and Bristol (0.28%) facing increases, with other locations decreasing, reflecting weaker rental performance and ongoing structural challenges.
Flecknoe said: “Where high streets are struggling, lower rates, while welcome, cannot in isolation revive them. For many retailers, business rates are just one part of a broader set of challenges that includes shifting consumer behaviour, other taxation, online competition and the need for urban regeneration.”
Industrial & Logistics
The Industrial & Logistics sector is facing the financial consequences of its recent success and will be hit with by far the largest increase in rateable value and liability. Those with a rateable value of over £500,000 – typically, well-placed large warehouse units – will suffer a double hit of rising rateable values and the Higher Multiplier. In these cases, Cushman & Wakefield forecasts liabilities in London to rise 51.6%, North West 49.86% and North East 46.86%. While smaller properties may be less affected, the overall trend is still upward, with the lowest forecast increase expected to be 18.92% in the North East. This shift will have implications for lease negotiations, cost-sharing arrangements and long-term viability in high-demand areas. For a sector that has thrived on efficiency and scale, rising rates could become a new pressure point.
Read more of the latest news from us