On 1 April 2026, the new business rates revaluation will take effect across England and Wales, recalibrating liabilities for more than 433,000 office properties, including more than 105,000 located in London.
While the purpose of revaluation is to reflect shifts in market rents and maintain fairness in the tax base, it also reveals powerful geographic and sector-specific trends.
London, in particular, remains the centre of gravity for office-related rateable value.
It may only host 24.3% of all office hereditaments in England and Wales, but it is expected to account for 56.7% of total office rateable value after the revaluation—a striking statistic that reflects both the density and value of workspace in the capital.
How the 2026 revaluation is calculated
Business rates revaluations are based on an estimate of open market rental values as at a fixed point in time—known as the Antecedent Valuation Date (AVD).
For the upcoming 2026 Rating List, that date is 1 April 2024. The Valuation Office Agency (VOA) will assess what rent a property could reasonably command on the open market on that day, assuming it was vacant and available to let.
This valuation replaces the previous AVD of 1 April 2021, which formed the basis of the 2023 Rating List. The new list, therefore, captures a three-year shift in market sentiment, demand patterns, and occupier behaviour, including the continuing impacts of hybrid working, environmental, social, and governance (ESG)-led space rationalisation, and post-pandemic economic adjustment.
While the list takes effect in April 2026, the snapshot of market value was taken in April 2024. It is this time lag that can sometimes surprise occupiers, particularly where market conditions have moved again in the interim. Understanding that time gap is key to interpreting the new rateable values and identifying opportunities to challenge them if the VOA’s evidence is unrepresentative or outdated.
The office picture: A market in transition
Nationally, projected percentage changes reflect shifts in open-market rents between the AVDs, suggesting a 9.7% uplift in office rateable values since the last revaluation. That equates to a £1.51 billion increase, taking the total office rateable value to £18.16 billion. In London, the increase is slightly more modest—8.5% overall—but that still equates to a rise of £0.8 billion, bringing London’s share of office rateable value to £10.29 billion.
What this top-line figure masks is a tale of two cities, with inner London boroughs seeing divergent outcomes based on office quality, occupier demand, and broader location trends.
The losers: Central demand drives growth
In Westminster—the capital’s commercial and political heart—office rents have surged by 13.6% overall, more than any other London borough. Camden (10.7%) and Kensington and Chelsea (11.7%) also saw double-digit increases, reflecting ongoing demand for prime, well-connected, and ESG-compliant workspace in core central areas.
Other boroughs like Waltham Forest (12.2%) and Redbridge (11.49%) point to increasing decentralisation and demand for outer London hubs, potentially driven by hybrid working and cost-conscious occupiers.
The winners: Legacy stock and flight to quality
However, not all parts of the capital have experienced rental growth between the valuation dates. In boroughs such as Hammersmith and Fulham (–4.62%), Hounslow (–4.39%), and Hillingdon (–3.88%), office rents have declined, indicating weaker occupier demand, potentially ageing stock, or limited market transactions to underpin value growth.
This divergence reflects an accelerated flight to quality in the post-pandemic era. Offices that fail to meet modern occupier expectations—in terms of layout, energy performance, or location—are now struggling to justify their pre-pandemic valuations.
Implications of the 2026 revaluation
Bill volatility and supplementary multipliers
With a revaluation being revenue-neutral, the national multiplier will be reset to balance the total tax take. However, properties in England with a rateable value above £500,000, including more than 3,350 London office buildings, will also be subject to a new supplementary multiplier of up to 10p from April 2026.
This means that large office occupiers in the capital could see compound tax increases, even where their own rental values have not significantly changed.
Transition without downward caps
The government’s commitment to retain uncapped downward transitions (as introduced in 2023) is significant for London offices with falling values. As in 2023, these ratepayers will see the full benefit of reduced rateable values from day one—a change that Ryan strongly advocated for.
Budgeting, forecasting, and appeals
For landlords and occupiers alike, the 2026 list creates both risks and opportunities. Understanding the precise impact on your property or portfolio and identifying scope for appeal based on rental comparables or factual inaccuracies are crucial.
What office occupiers should do now
With the draft 2026 Rating List due for publication later this year, office occupiers should begin proactive scenario planning now:
- Review leases and rent reviews to assess evidence that could affect valuations.
- Check VOA records for any factual errors that could distort liabilities.
- Model a range of scenarios to understand potential changes in bills.
- Plan budgets to absorb potential cost increases.
- Identify properties for potential appeal post-draft list.
Final thought: A redistribution, not a windfall
The 2026 revaluation will reshape who pays what. For London’s office market, this is not just a tax story—it is a market narrative. As demand shifts and occupier behaviour evolves, business rates will increasingly reflect which locations, specifications, and formats remain viable—and which may no longer justify their cost.
For London’s office landlords and occupiers, success will come not from assumption but preparation.
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