Montagu Evans Warns of Significant Business Rates Shifts at 2026 Revaluation

New research report sets out sector-specific analysis for financial forward-planning

Montagu Evans has published new research forecasting significant changes to UK business rates liabilities from 1 April 2026 when the next Revaluation takes place and the new Rating List comes in.

The partnership’s report highlights not only the shifts expected as a result of post-pandemic bounce back and recent government initiatives, but that – for the first time – the government’s approach will calculate business rates by use class as well as property value.

Providing a high-level view of how values and liabilities may be impacted before the Draft Rating List comes in the autumn, it sets out what businesses should do now to prepare themselves for these likely changes.

Understanding rateable value and multiplier movement is critical. Montagu Evans forecasts an overall weighted increase in rateable value of 9.1% across the prime property classes: office, retail and industrial & logistics. On top of this, it anticipates that the overall % growth in the aggregate rateable value included in the Rating List will be greater than this, reflecting additional sectors not listed above and specifically those valued with reference to their build cost or profitability. As a result, it estimates that the overall increase in rateable values for businesses will be in the range of 12.5%-15%.

This is underpinned by the recommendation that this information is used as a general guide, and businesses need bespoke advice that is right for their specific circumstances.

• Industrial & Logistics: At a national level, assessments on industrial & logistics (I&L) properties are anticipated to increase on average by 28.6%, more than twice the figure for all properties, likely leading to significant increases in liability. Given that rents in the sector have increased by almost 40% over the past five years, this will prove challenging for many occupiers if forecasted RV increases flow through into liability.The proportion of the current Rating List made up of I&L assessments currently stands at 21.7% and will increase significantly with the new Rating List.
• Offices: At a national level, offices properties are anticipated to see average rateable value increases of 6.0%, below the all-property figure of 10.6%. But outside prime offices in the strongest locations, occupiers’ liabilities may fall from April 2026.
• Retail: At a national level, rental values for retail properties are anticipated to fall on average by 0.6%, delivering reduced assessments and, given the new multiplier regime, likely much-reduced liability for many occupiers, other than those operating from larger units or in stronger locations. It is important to note that looking at retail as a single sector masks the significant range in value movements within the subsectors, not least of which is driven by in-town/out-of-town market dynamics.

Josh Myerson, Head of Rating at Montagu Evans, said: “The impact for businesses of the next Revaluation in already uncertain economic times could be serious: forecast too high and valuable resource will be diverted from growth/investment decisions; pitch too low and an unavoidable cost will sit in the corporate P&L.

“The position will only be fully clear as we move toward the end of 2025, when both ratable values and the new multiplier regime is announced, giving ratepayers less than six months to meaningfully prepare. But anticipating future movement and thinking now about how to mitigate the potential impact can significantly support businesses’ forward planning.”

“This new research report bridges the gap, including an overview of the Government’s timeline, background on the likely changes, advice from our sector experts and a checklist to help prepare.

“We would encourage businesses to engage sooner rather than later to better understand next year’s impact on their particular circumstances and develop appeal strategies to identify and challenge liabilities at the earliest opportunity,” Myerson added. “It is more important than ever to ensure the facts upon which the Valuation Officer has based their assessment remain correct.”

Jon Neale, Head of Research and Insight at Montagu Evans, said: “In recent years rental growth has become much more varied within the property sector; offices and retail have seen flat or low levels of rental growth, while industrial & logistics has soared away, especially in prime locations.

“These headline figures obscure greater variation by geography and subsegment, which makes it more difficult than ever for businesses to understand how rates liabilities will change for individual buildings. For example, while there has been significant rental growth in offices on average, this is almost entirely driven by better quality buildings in the main office locations. Retail and to a lesser extent industrial show similar, if less extreme, patterns.

“This report will allow occupiers to gain a clearer idea, based on their building, its location and the sector it serves, as to how their business rate liabilities will change next year.”

View and download the full report here: https://www.montagu-evans.co.uk/research/business-rates-revaluation-2026/