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    Relocation, relocation, relocation!

    Will rising business rates prompt exodus to cheaper areas?

    The freeze on business rates imposed by Jeremy Hunt is due to end in April, which has led to fears of crippling cost increases for small businesses. Money.co.uk business loans decided to look into which areas have the highest commercial property rents – which affects the business rates that are charged – as well as which areas have the most available commercial units. This will allow them to ascertain the most commercially viable areas for struggling businesses to relocate to.

    Their research revealed that areas such as Birmingham, Somerset and County Durham provide rents under £100 per sqm as well as being in the top 10 for highest property availability and choice:

    • Westminster has the highest number of available properties as well as the highest rent
    • Birmingham has the second most properties available after Westminster, yet the rent is seven times less.
    • Birmingham, Somerset and County Durham provide rates under £100 per sqm as well as being in the top 10 for the highest property availability
    • West Lindsay ranks 31st on the list of places with the most available properties, as well as ranking number five on the list of cheapest rent.
    • West Lancashire is in the top 20 for lowest rent but is also one of the top 50 areas with the most available properties – making it a good place for new businesses to set up.

    The research also revealed that generally, the areas with the lowest rents have the least number of properties available. This reinforces the notion that rents are something businesses consider a priority when deciding where to base themselves.

    The graph below shows that as rent increases, so does the amount of available properties.

    Relocation, relocation, relocation!

    “With the business rates rise on the horizon of the coming year, small business owners might find the impact is multifaceted. Small businesses often operate on tight budgets, so an increase in business rates can strain their finances, leading to reduced profits or even financial losses,” said loans expert Cameron Jaques of Money.co.uk business loans, speaking about how important it is for small business owners to factor increasing rates into their long-term plans.

    “Higher operating costs due to increased business rates may also make it harder for small businesses to compete with larger corporations. They may struggle to offer competitive prices or invest in growth initiatives.

    “Finally, as business rates are typically paid annually or semi-annually, small businesses might experience cash flow issues when they have to set aside a significant amount of money to cover the increased rates.

    “Relocating your business to an area with lower rates can be disruptive and costly in the short term, as it involves moving personnel, equipment, and potentially establishing new customer relationships. However, if it mitigates the aforementioned problems concerning cash flow and profit, it might be worth considering.”

    Top 10 cities with lowest business rates/rent:

    Local authorityAvailable propertiesAvailable properties as a % of propertiesTotal area (m/2)Total rent valueRent per sqm# of properties
    North Lincolnshire210.13%3494843£93,530,952.00£26.7616775
    North East Lincolnshire640.37%2733747£87,755,212.00£32.1017201
    Rossendale440.47%1011056£34,450,638.00£34.079374
    Powys470.26%1503739£53,095,380.00£35.3117922
    West Lindsey560.73%1037290£37,210,212.00£35.877664
    Erewash420.34%1582457£57,269,856.00£36.1912377
    Neath Port Talbot160.12%1510105£54,962,356.00£36.4013037
    Blaenau Gwent120.18%826422£30,135,475.00£36.476830
    East Riding of Yorkshire150.04%4910816£182,570,575.00£37.1837465
    Mid Suffolk340.34%1510932£56,344,265.00£37.299958

    Top 10 cities with the highest number of available properties as a % of properties

    Local authorityAvailable propertiesAvailable properties as a % of properties Total area (m/2)Total rent valueRent per sqm# of properties
    Islington4031.45%2274858£656,439,477.00£288.5627733
    Hackney3711.41%1663931£445,415,177.00£267.6926242
    City of London4251.27%7418676£3,228,031,247.00£435.1233579
    Westminster10211.11%7954997£4,821,811,742.00£606.1491714
    Oadby and Wigston461.03%546422£28,623,559.00£52.384472
    Watford871.03%1017077£144,356,655.00£141.938476
    Cheshire West and Chester3551.02%4133994£287,504,282.00£69.5534866
    Warrington2221.02%3515825£226,415,411.00£64.4021852
    Manchester5831.02%6493418£749,825,333.00£115.4757435
    Southwark3070.99%2834875£868,604,049.00£306.4030922

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