It’s an understatement to say that Covid has, is, and will continue to have a significant impact on all of our lives for some time to come, but what are the implications of C-19 for our offices? Specifically, what are the implications with regards to rateable values, rates bills and the processes involved in achieving an accurate rating list?
It is clear that the government’s requirement that we stay at home where possible and the imposition of social distancing measures has had an effect on the value of commercial real estate, not least offices, but to what extent remains quite literally the million dollar question. To answer this is to arrive at the answer to the question of what level of reduction should be afforded to our current rates liability.
Other sectors such as retail, hospitality and leisure can articulate the effect accurately through the downturn in trade and footfall, and have articulated the same though the media, whereas the ability to be so precise for offices is near to impossible. We will point to the requirements for greater spacing and the lack of amenities, but to quantify will require that we stand back and look.
Due to the lack of relief and grants similar to those afforded to the retail, hospitality and leisure (RHL) industry we are extremely grateful for the proactive approach taken by the valuation office agency, in no small part at the behest of the Rating Surveyor’s Association. Their acceptance and acknowledgement for the need to investigate whether Covid has materially affected the value of our offices and also their willingness to move forward swiftly in quantifying exactly what that means in monetary terms is to be applauded.
Ratepayers should however be aware that, unlike RHL relief, access to any such temporary reductions in rateable value will require engagement with the government’s Check, Challenge, Appeal system; a system that has widely been hailed as unfit for purpose. It is important therefore that a proactive approach is taken by ratepayers prior to the easing of any restrictions.
As we look forward to a brighter future, inevitably there will be questions raised over office demand. There is a suggestion that potentially up to 25% of us will continue to work from home post pandemic, but will the requirement for less desks be offset by the need to have more collaborative spaces for the times we are in the office? It may be that the pandemic has simply sped up the evolution of the office environment.
The news of the revaluation being postponed until 2023 was welcomed by many, offering clarity in rates liability during uncertain economic times. The reality may in fact be very different. The revised valuation date is likely to coincide with the easing of the restrictions on our movement, it is not likely to coincide with a wealth of market evidence, either pre or for any significant time, post our valuation date. The result of which may well lead to inaccuracies within the rating list.