Year 2016 on the street with arrow

With the upturn in the commercial property market predicted to continue during 2016, we thought it would be a good opportunity to have a whistle stop tour through some of the changes in legislation expected to come in this year:

1. Changes to business rates

A structural review of the business rates system is currently underway with a target of reporting any recommendations by the Budget this year. This could lead to a revised business rates scheme being created to be rolled out later in 2016. Current market thoughts are that the changes could range from simply having more regular valuations to ensure that business rates are fairer, to more radical changes basing business rates on revenues generated from a particular site. The extent of the changes won’t be known until they are announced in the Budget this spring.

The Government is also likely to announce the creation of more enterprise zones from April and these zones will benefit from the same reduced business rates relief available to the existing zones.

2. Pubs Code Regulations 2016

A statutory code to govern the relationship between large chain pub owners and their tenants is likely to be finalised, following consultation during 2015. The code is expected to tighten up the law surrounding ‘tied in’ tenancies (i.e. those where the Tenant is required to buy their beer from a certain supplier – usually the landlord) to allow these tenants to escape the tied in arrangements after certain trigger points which should lead to them being more competitive.

The actual detail of the regulations remains to be seen but the changes are unlikely to be welcomed by the larger pub chains.

3. Minimum Energy Efficiency Standards

As published in previous blog posts, the Energy Act 2011 required regulations to be put in place to ensure that both residential and commercial properties being let in England and Wales have a minimum standard of energy efficiency.

The first tranche of these regulations is due to kick in for residential properties from April this year and will allow tenants to request their landlord’s consent to make energy efficient improvements to their rental property. Landlords will be under a duty not to unreasonably withhold consent to any such requests.

Whilst that doesn’t sound too painful, the regulations however don’t stop there, and from April 2018 Landlords of both residential and commercial properties will be required to ensure their properties meet a minimum ‘E’ rating on the EPC report before they will be able to grant new leases.

And finally…

4. Measurement Code

Unless you’re a member of the RICS, this one may have slipped under the radar; however as of 1 January a new RICS Property Measurement 1st Edition has been introduced to be used for the measurement of office buildings.

This new code hopes to internationally standardise the way office buildings are measured when calculating the gross internal area for rent purposes. These changes are likely to require the updating of all precedent documentation and practices used in relation to office buildings.

This post was edited by Alex Parkes. For more information, email blogs@gateleyplc.com.


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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.