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What is the 2026 business rates revaluation?

The revaluation, which takes effect from 1 April 2026, will update rateable values to reflect changes in rental values between April 2021 and April 2024. The goal is to realign the business rates system with current market conditions, so properties with increased rental values will see higher liabilities, while those with reduced rents will benefit from lower business rates, essentially a redistribution of the tax base.

In terms of how the revaluation will impact London’s office market specifically, the increase in rateable values for London offices could be around 13%, but the impact will vary greatly between sub-markets. This reflects how uneven rental growth has been across the city. Demand, supply constraints, and evolving occupier needs all play a role in these localised outcomes.

For the impact on UK Cities’ office market there will be an average increase of around 16% across all submarkets, with Reading seeing the biggest increase at 38% and Cardiff and Aberdeen with the smallest, with no change.

• Implications for occupiers
  Businesses in areas facing big hikes in rateable values could see substantial increases in their business rates bills. For some, that may trigger a reassessment of their space needs - companies becoming more cost-sensitive due to inflation and broader economic uncertainty. Higher business rates might accelerate decisions to downsize, move to more affordable areas, or even change workplace strategies entirely.
•  Implications for landlords 
  Landlords in high-impact zones may face challenges retaining tenants due to increased occupancy costs. In response, they might need to offer more attractive lease terms or invest in improvements to justify the costs. Meanwhile, landlords in areas like Bloomsbury in London where rateable values are expected to drop, could benefit from a competitive advantage - these areas may become more appealing to budget-conscious occupiers.

Broader system changes
The Labour government’s recent paper, , outlines broader changes to the system. From the 2026/27 fiscal year, there will be:

• Adjusted multipliers to reduce rates for Retail, Hospitality, and Leisure (RHL) sectors.
• Increased burden on non-RHL sectors, particularly properties with rateable values over £500,000.

This means many  offices - especially prime assets in locations like central London - will bear a greater share of the tax burden, aimed at addressing the imbalance between physical and digital retail channels.

Proactive steps occupiers should take now

Review current liabilities and be ready for the draft 2026 list, which will be published in the autumn. The deadline to challenge new assessments will be 31 March 2026, so early engagement is key. Also, since April 2024, there's a 12-month improvement relief available for qualifying works - occupiers should explore if they’re eligible.

Engaging a specialist rating advisor can help avoid compliance pitfalls and uncover opportunities to reduce costs.

An opportunity for landlords to refocus

Understanding how the revaluation affects a landlord’s portfolio’s rateable values is crucial. Landlords should assess the likely impact and consider strategies like:

• Investing in enhancements that boost tenant retention.
• Offering more flexible lease structures.
• Challenging assessments, which can support rental growth and reduce voids.
  In addition, landlords need to monitor the government’s planned changes to empty rates relief, as this could affect holding costs on vacant assets.

This is a pivotal moment for the office market. The effects will vary by location, as will the right strategy . Both occupiers and landlords should act now - review liabilities, understand the upcoming list, and engage experts. With informed planning, this revaluation can be managed strategically, rather than reactively.

For more insights into the 2026 business rates change, or to use our interactive heat map, visit our Business Rates Revaluation page.