View this email in your browser

Market Outlook

Autumn 2022
In our last newsletter in July, it felt like we only had bad news to talk about. Evidently, the reality of the last few months could not have been imagined even whilst in the most deranged and pessimistic mood! There seems little point in dissecting what has happened – there is no shortage of commentators who have done so already; to death.

Those of us that own and manage property and property companies, must ultimately try to tie this back to the market to mitigate risks and seek opportunities, without being completely distracted from the day job.

Looking for the bright side – out of chaos we can expect to find real opportunity in price dislocations and distress. These moments must be taken advantage of by those that can, and we have aligned ourselves with active capital so that we can act when the opportunities arise. This, we expect, will occur over the next 12-24 months.

Whilst buying cheap has its obvious attraction, for those with an existing portfolio, keeping an eye on the bottom line becomes a hyper-critical strategy all on its own.

We have now fully launched our business rates advisory business under our QuoinStone Professional Services brand. We have broad expertise in the team with Katy Ellis heading the rating business and we’re assisting landlords and tenants across all aspect of their rates exposure. We’re growing fast as the demand mounts up and we expect this to continue given the economic environment that we are now entering. For examples of the work we are doing, and to see if we can assist you, have a look at our case studies.

2023 Revaluation 

As we look to the new 2023 revaluation, 5 months away, we await publication of the draft rating list. Due at the end of November this will be the first insight for ratepayers as to what they can expect to pay over the next 3-yearly revaluation. This combined with the expected announcement of the Uniform Business Rates (UBR) multiplier, will give rate payers the actual liability that they will have to pay. The first real opportunity to budget for one of the biggest costs businesses must bear. 

The UBR is usually inline with the inflation rate and with this running at 10.1% the potential increase to the rate payer is quite an unknown. Over the past two years we have seen a freeze on the increase of the UBR and it will be down to our new PM, Rishi Sunak and Chancellor, Jeremy Hunt to take charge and manage this carefully for all ratepayers. Rishi was quoted at a husting, that supporting business particularly in the retail and hospitality sectors would be 'top of his mind' and he was committed to extending the 50% discount in his first budget. With the potential for rates increases it will not just be these sectors that are in need of his support. 

We are expecting shorter revaluation periods. Since 1990 the previously standard 5 yearly cycles are to be reduced to 3 yearly going forward. Rates are supposed to represent open market lettings and it is thought more frequent revelations will bring us closer to this. The antecedent valuation date (AVD) is always 2 years preceding the start of the revaluation so for the 2023 list the AVD is 1st April 2021, which was at the height of the pandemic so rental evidence will be scarce.  

Once you know your draft list rateable value, you can contact us to help you budget and make sure you have any relief you're entitled to and if you have any empty property, use our calculator to see what you could be saving if you are correctly mitigating your liability. 

There is still time! Be proactive and get back 6

years’ worth of savings. 

Under the current legislation, ratepayers can initiate an appeal against their business rates assessment on the current 2017 rating list up until 31st March 2023, which is the last day of the current list.  

To “Initiate” means to start the “check challenge appeal” process by serving a check on the property via the Valuation Office Agency (VOA). 

Why appeal your business rates assessment? 

If you feel there has been a material change in the property’s circumstances e.g. a change in its physical state, a change of use in the neighbouring property or a physical change in the locality, you should strongly consider making an appeal. Examples could include the removal of a mezzanine floor, the closer of a local road that restricts access or the construction of a competing shopping centre. 

If the VOA agree the property has been overvalued, they will have to issue a refund for the rates you have overpaid since the beginning of the list, or at a later date if you acquired the property after 1st April 2017.  

How to make an appeal? 

Firstly, make sure your rates have not already been reviewed or appealed in the 2017 list. If you need help, we are more than happy to look at your properties, assess if an appeal would be appropriate and if so, take the property through the process on your behalf.  

What does the end of the 2017 list mean for me?  

You will be provided with a new Rateable Value, which will last up until 31st March 2026. From the 1st April 2023, we can start the appeal process on your new 2023 rateable value. The VOA will produce a draft figure in December 2022 so you can see what your new RV will be well in advance of 31st March 2023.  


Revenue or Costs?

Landlords have a heady mix of cost line items to consider as we approach critical environmental targets in the form of MEES, enhanced service expectation from tenants and increasing debt costs. Combined with faltering tenant demand in some markets and a downward trend in rental values, the issues are obvious and the solutions few and far between. 

As an asset manager with decades of experience across sectors, we take an unconstrained approach to finding value in our assets. With judicious capex in the right places, we look to drive cashflow focussing closely on averting void cost exposure. We review planning options to take advantage of, for example, permitted development rights. Asset repositioning during a recession, for those with deep enough pockets, can be the most economical time to reduce income, whilst the market is subdued anyway. 

Rebasing the valuation can open up previously unjustifiable options. Whilst providing competitively serviced office space brings with it management cost, with the right partners on board, revenues can be enhanced when the market recovers. Alternative income streams, change of use, advertising, EV chargers, temporary users. All options should be considered to keep the top line as full as possible. 

Sometimes though, simple, good quality asset management is the most important ingredient. 

We speak to our tenants regularly, we stay close to them, and we spot leasing opportunities, regears, lease extensions, space swaps. For every tenant needing to downsize, there is usually another one hoping to expand. It happens regularly, and being in touch with occupiers has to be job number one! 

It's not all doom and gloom...

With interest rates rising, gilt yields blowing out and markets reeling whilst the Government seemingly fails to gain control of their own house nevermind the economy, it is easy to become despondent as a property investor. 

However, let's not lose sight of the upcoming opportunities. Ignoring for a minute legacy portfolios and upcoming refi's, we are already seeing distress in the market and heavy discounts on pricing. There will be more to come! 

Underlying build cost and certainty of income are key and it is a good time to remember the fundamentals rather than relying on cheaper debt and over optimistic ERV's. 

As value add investors we are looking forward to finally seeing some value opportunities. 


As we continue to expand our business beyond asset management and proptech investment, into property consultancy, we are optimistic about the future. We are growing a great team and looking forward to continued investment and to servicing our ever growing client base.
Tim Struth MRICS
Owner & CEO
Tim is co-owner responsible for management, operations and business strategy.
Steve Howling MRICS
Owner & Client Relations
Steve is co-owner responsible for client networks & business growth. He leads on market intelligence.
Billy Struth
Senior Surveyor
Billy is responsible for client networks and business growth. He leads on delivery of professional services.
Katy Ellis 
Owner & Head of Business Rates
Katy is co-owner responsible for product & leads the Business Rates Team.
Copyright © 2022 Quoinstone Group, All rights reserved.

Want to change how you receive these emails?
You can
update your preferences or unsubscribe from this list.