Aug 1, 2017 - â¢In the last five months, since the revaluation, 62% had said that the business rates increase had led t
AUGUST 2017
Survey Sample Overview
• Target Market: London Based Small Businesses • Survey methodology: e-Mail Survey Survey date: 23 July 2017 – 23 August 2017 • Sample size: 99 Small Business Owners / Business Representatives • Key Segments: • Number of employees: Zero, 01 – 09, 10-49, More than 50 • Half of businesses based in Zones 1 and 2
Business premises owned by separate landlord Business premises owned by separate landlord 20%
80%
Comments 80% of small business premises are owned by separate landlord
Smaller size businesses less likely to use business premises owned by separate landlord
No Yes
Relationship with your Landlord 35% 30% 25% 20% 15% 10% 5% 0%
Relationship with Landlord
Very Negative
Fairly Negative
Neither Positive or Negative
Fairly Positive
Very Positive
4%
10%
30%
30%
26%
56% of small business see their relationship with landlords as positive in comparison to 14% who conceded relationship as negative. The levels in 2016 were 51% positive compared to 18% negative. 30% of businesses gave a neutral response.
When is the next rent review due?
40% 35% 30%
25% 20% 15% 10% 5%
0% Rent review
In more than five years time 11%
Within the next five years 17%
Within the next three years 34%
Within the next year 38%
Comments 72% of small businesses have a rent review due within next three years, out of which 38% have a review due next year.
The expected percentage change following the rent review
The average small business, with commercial premises across Zones 1-6, will see an average increase, at the time of the next review, of around 25% (with some firms quoting zero increases - and one member stating a 400% increase) The average small business in Zone 1 will see an average increase of around 34%
Expected outcome of renewal negotiation
2017 data 50% 40% 30% 20% 10% 0%
Expected outcome of renewal negotiations
Compared to the results in 2016………
To remain in the same property with favourable terms
To remain in the same property with unfavourable terms
To vacate the property (on my terms)
To vacate the property which is not by choice
12%
48%
24%
16%
Percentage of revenue that goes on rent and rates 25.00 20.00 15.00 10.00 5.00 0.00
% of revenue
Avg % of revenue that goes in rent 19.12
Avg % of revenue that goes in rates 10.75
The average small business, with commercial premise, now pays 30% in rents & rates – compared to 20% in last years survey 19th April 2018 is therefore the ‘Rent and Rates Freedom Day’ when small firms in London stop paying these flat indirect costs – when the survey was run last year - March 15th 2017 was the date when businesses were free from paying these fixed costs.
Does your business qualify for rate relief? From 2017, businesses with a single property with a Rateable Value of under £12,000 pay no rates. Does your business qualify for this relief?
Does your business qualify for rate relief? 14%
9%
77%
Don't know No Yes
When we asked whether businesses qualified for rate relief in 2016 – 36% answered ‘yes’ – compared to 14% in 2017 following the rates revaluation.
Business Rates Revaluation
In the last five months, since the revaluation, 62% had said that the business rates increase had led to a negative impact on their business, 22% said there was no change and 13% said it was too early to tell. 3% said the rates revaluation had seen a positive impact 64% of businesses said that they had seen an increase in their rates bill since the April 2017 revaluation 92% of businesses have yet to be contacted about discretionary Relief schemes announced in the Spring Budget
the
local
Have you applied for relief in the last three years? Applied for relief with local authority in Last 3 years
43%
No
57%
Yes
And were you successful? Comments
Result of application 2017 18% 38% 44% Still awaiting a decision Successful Unsuccessful
There was a much higher success rate in 2016 when the figure stood at 69%. A much greater number are still awaiting a decision (only 12% said they were awaiting a decision this time last year compared to 38% this year)
Are you expected to be in the same location in the next five years?
Will you be in the same business location in 5 years
48% No
Yes
52%
Zone 1 businesses are more uncertain about being in the same property in next 5 years (with 62% answering ‘yes’) Businesses were less confident about being in the same location in half a decade when asked the same question last year.
