Rental rises for best office space in Birmingham, Leeds and Manchester to be reflected in new rates bills estimated to rise over 25%.
Businesses occupying prime Grade A office property in the Central Business Districts of Birmingham, Leeds and Manchester will see significant rises in their business rates bills next April, following the 2026 Revaluation, according to Colliers Business Rates team. Colliers estimate that office occupiers in the best space in Birmingham could see increases of up to 26% in their bills next year, in Manchester, an increase of 25% and in Leeds, perhaps as much as +44%.*
Colliers has analysed rental values in the prime Grade A office space in the three cities’ CBDs as at the Valuation date of April 1st, 2024. These reflect that best in class space remained in high demand with short supply driving rental growth. As a result, Colliers predict we will see that rateable values will have increased since the last list, with Birmingham RVs increasing 45%, Leeds 67% and Manchester 44% over the three-year period.
As a result of this market performance and expected increases in the multiplier, (Colliers is anticipating a UBR of £0.48 for next April**), Colliers believes the 2026 Revaluation will bring about significant increases in liabilities for occupiers of grade A space office in the City Business Districts. As the table shows, rates bills in Birmingham are expected to grow from £16 psf this year top over £22 next, Leeds from £12 to nearly £20 psf and Manchester from £15 to £21 psf.
space office in the City Business Districts. As the table shows, rates bills in Birmingham are expected to grow from £16 psf this year top over £22 next, Leeds from £12 to nearly £20 psf and Manchester from £15 to £21 psf..
|
City/Region |
2025/26 Liability per sq ft |
2026/27 Liability per sq ft |
Predicted % change in Liability 2025 to 26 |
Predicted % change in RV 23 to 26 |
|
Birmingham CBD |
£15.98 |
£22.15 |
+25.54% |
+45.16% |
|
Leeds CBD
|
£12.37 |
£19.69 |
+44.14% |
+66.67% |
|
Manchester CBD |
£15.21 |
£20.90 |
+24.59% |
+44.07% |
As John Webber, Head of Business Rates at Colliers said, “Of course we are talking about the best office space in these regional centres- in the CBDs- and there will be poorer stock elsewhere not seeing such a high growth in rental values and therefore in liability.
Similarly, even with these hikes, the rents and rates bills in these business areas will still be significantly more attractive than in London. Our recent London office research estimated that 13 out of 27 London business areas will have business rates bills based at over £40 per square foot after the Revaluation. These regional centres are generally about half of that.
Even so, in the local regional market these rises will be significant- and all point to the increasing burden that business rates bring onto businesses, at a time when they are facing other rising costs elsewhere. This may curb further investment and expansion. Finance Directors and CEOs of businesses in prime regional office space will need to be budgeting and planning for increased office occupancy costs within their property strategy, and using really robust local market expertise to challenge any inappropriate increases published in the Draft List later this year.”
*These rises exclude the impact of any transitional relief scheme that may be introduced.
**And for larger properties with a RV of over £500,000, the multiplier (and hence the rates bills) will be even higher
Methodology: Business rates liability (bills) is based on the rateable value (RV) of a property multiplied by the “multiplier” or Uniform Business Rate announced by the Government each year. The rateable values for the 2026 list are effectively based on the rental level of the property as of 1 April 2024 (the valuation date).