Revaluation 2010 The view from the other side AKA the Private Sector Valuer! David Bingham BSc(Est Man) FRICS IRRV

Who are we - what do we do? Usually members of RICS or IRRV Usually members of RICS or IRRV Advise the payers of Non Domestic Rates Advise the payers of Non Domestic Rates What then? What then? Usually tell them that they are paying too much! Usually tell them that they are paying too much! But seriously But seriously We use our skill and knowledge to decide whether it is the ratepayers interest to lodge an appeal We use our skill and knowledge to decide whether it is the ratepayers interest to lodge an appeal Do most ratepayers know what their best interest is? Do most ratepayers know what their best interest is?

Revaluation 2010 The Impacts and Implications Impacts Nationally - Winners and losers: Impacts Nationally - Winners and losers: Winners – paying less Winners – paying less Most industrial and distribution Most industrial and distribution Older offices Older offices Secondary and tertiary retails Secondary and tertiary retails Losers – paying more Losers – paying more West End and City of London offices West End and City of London offices Foodstores Foodstores Many Leisure properties Many Leisure properties Properties valued on Contractors test basis Properties valued on Contractors test basis Impact on the East Midlands Impact on the East Midlands Generally RV increase lower than rest of England Generally RV increase lower than rest of England So – less work for the private sector valuer? So – less work for the private sector valuer?

Revaluation 2010 The need to appeal Economic background and the financial markets Economic background and the financial markets Three things to consider: Three things to consider: Changes between the AVD and Compilation date Changes between the AVD and Compilation date The number of “no change” RV’s The number of “no change” RV’s Contractors Test against Rental Value RV’s to Contractors Test against Rental Value RV’s to

Revaluation 2010 What is a valuer/adviser to do? Things to consider -1 Changes between AVD and compilation date Changes between AVD and compilation date Compiled List valuation Material day is ………..? Compiled List valuation Material day is ………..? All Physical changes between 1 st April 2008 and 1 st April 2010 have to be taken into account – as though they had been in place at AVD (LGFA Sch6 s2(7)) All Physical changes between 1 st April 2008 and 1 st April 2010 have to be taken into account – as though they had been in place at AVD (LGFA Sch6 s2(7)) This means that both newly completed space and vacant property at 1 st April 2010 have to be taken into account – effect on the market e.g. empty shops This means that both newly completed space and vacant property at 1 st April 2010 have to be taken into account – effect on the market e.g. empty shops This will affect all property classes This will affect all property classes

Revaluation 2010 What is a valuer/adviser to do? Things to consider -2 “No change” RV’s – some stats! “No change” RV’s – some stats! There are 2899 entries in the 2010 Draft rating List which have the postal town “Solihull” There are 2899 entries in the 2010 Draft rating List which have the postal town “Solihull” They cover all property classes They cover all property classes Of these 490 have a 2010 List RV that is exactly the same as the 2005 list RV Of these 490 have a 2010 List RV that is exactly the same as the 2005 list RV This is 17% of all properties – typical of other areas This is 17% of all properties – typical of other areas This suggests that for 17% of all properties their rental value is exactly the same at 1 st April 2008 as it was at 1 st April 2003 This suggests that for 17% of all properties their rental value is exactly the same at 1 st April 2008 as it was at 1 st April 2003 Can this really be the case? Can this really be the case? Try telling a landlord’s surveyor this fact at a rent review negotiation! Try telling a landlord’s surveyor this fact at a rent review negotiation!

Revaluation 2010 What is a valuer/adviser to do? Things to consider – 3 Contractors test valuations (e.g. LA Leisure centres) Contractors test valuations (e.g. LA Leisure centres) Rental value valuations have increased on average by 16 – 17% over all classes Rental value valuations have increased on average by 16 – 17% over all classes Most industrials less Most industrials less Costs for contractors test valuations have increased (apparently) by 40%+ Costs for contractors test valuations have increased (apparently) by 40%+ Decapitalisation rate remains the same Decapitalisation rate remains the same Even with higher age and obsolescence allowances RV’s Of Contractors Test properties have gone by considerable more Even with higher age and obsolescence allowances RV’s Of Contractors Test properties have gone by considerable more Will this stack up? Lots of lovely appeals and hopefully juicy fees! Will this stack up? Lots of lovely appeals and hopefully juicy fees!

Revaluation 2010 Source of instructions Major national Valuation Surveyor practices Major national Valuation Surveyor practices Established clients retail and industrial Established clients retail and industrial Local Valuation Surveyor practices Local Valuation Surveyor practices Hard hit local retailers Hard hit local retailers Occupiers of Contractors Test hereditaments Occupiers of Contractors Test hereditaments Occupiers of SBR/other relief threshold hereditaments Occupiers of SBR/other relief threshold hereditaments Empty properties Empty properties Rating Cowboys Rating Cowboys Hopefully they will not get any! Hopefully they will not get any!

Revaluation 2010 Rating Appeals – the mechanical bits New proposal time limits – 2010 List SI 659 – effective 1 October 2009 Only one proposal 2005 List proposals – new time limits Must be made before 31 March 2010 MCC appeals arrangements changed from 2000 List MCC appeals must now be swerved by 31 march 2010 Alternatively persuade the VO to change the List or ask RA to send in a “report” VO should then act Other Circumstances Following LVT,VT or Lands Tribunal decision – no later than 30 September 2010 VO Changes to 2005 List Any time up to 31 March 2011 Right of Appeal still exists against changes

Revaluation 2010 Obstacles and hurdles! Valuation Office Agency Website – actually not too bad once the glitches are fully sorted Useful for comparables Not so handy for submitting repeat proposals Crashes rather too often Valuation breakdowns often denied by staff! Paperwork – large amounts of paper still being generated Target dates – some “tokenism” and attention to statistical performance Local Authorities Mostly very helpful! Local knowledge very useful – don’t use call centres/one stop shops please Valuation Tribunal New Regulations from 1 October 2009 Not fully worked out yet – national Presidents “Practice Statements” awaited! Transition and all other ills