Commercial property is priced on a handful of things that never appear in the particulars: which use class the consent actually grants, which of the five business rates multipliers now applies from April 2026, whether the seller has opted to tax, and whether the lease is inside or outside the 1954 Act. Each of those can move the real cost by tens of thousands. We check all four before you commit, and we tell you when the answer is bad.
Class E is the most valuable thing on a commercial title, because within it you can move between shop, office, café, gym, clinic, nursery and light industrial with no planning application at all. B2, B8, sui generis and most leisure uses sit outside it and carry none of that. Particulars get this wrong constantly, so we read the planning history.
From 1 April 2026 there are five multipliers, not two, and the top one is a cliff edge at £500,000 rateable value — it applies to the whole figure, not the excess. We give you the rateable value, the multiplier and the transitional position before you model the occupancy cost.
If the seller or landlord has opted to tax, 20% goes on the price or the rent, and on a purchase it lands in the SDLT calculation as well. It is the single most common late surprise in commercial. We ask the question at the outset, not at exchange.
Our fee is paid by the landlord or the vendor. No fee to you, no acquisition retainer — and no reason for us to talk you into a building that does not work.
Use, headcount, size range, power and access requirements, areas, and whether you are leasing or buying. Constraints rule buildings out faster than budget does, and it is cheaper to find them now.
Lawful use class and planning conditions, rateable value and multiplier, EPC and floor area, service charge scope, VAT position and lease structure — before you view, not after you have instructed solicitors.
Rent-free and incentives, repairing obligation and a photographed schedule of condition, break rights and their conditions, service charge caps, and whether the lease is inside or outside the 1954 Act.
For thirty years there were effectively two multipliers. From 1 April 2026 there are five, and which one you land on is now a function of both what you do and how big the property is. In England for 2026/27: 38.2p for retail, hospitality and leisure under £51,000 rateable value; 43.2p for other property under £51,000; 43.0p for retail, hospitality and leisure between £51,000 and £499,999; 48.0p for other property in that band; and 50.8p for everything at £500,000 and above.
Two further points that catch people out. The new retail, hospitality and leisure multipliers replace the annual RHL relief that had to be claimed each year — the discount is now built into the multiplier instead. And a 1p transitional supplement applies in 2026/27 to fund the transitional relief scheme, removed where transitional relief or supporting small business relief is in payment. Transitional relief itself caps annual increases at 5%, 15% or 30% depending on rateable value, with the small threshold set higher in London.
In September 2020 shops, offices, restaurants, gyms, clinics, nurseries, indoor sport and light industrial were merged into a single Class E. Movement between any of them is not development and needs no planning application. That flexibility is worth real money on both occupation and exit, and it is the first thing to establish about any commercial building.
What did not move into Class E: B2 general industrial, B8 storage and distribution, and the sui generis uses — pubs, bars, nightclubs, hot food takeaways, cinemas, live music venues, betting shops, launderettes and petrol stations. A sui generis building needs a planning application for almost any change of use, which is a slower and less certain route than most buyers assume when they look at a vacant one.
Class MA, the permitted development route from Class E to residential, requires two years of continuous lawful Class E use. The 1,500 square metre floorspace cap and the three-month vacancy requirement were both removed on 5 March 2024, which widened it considerably. Determination is 56 days, the most common refusal ground is inadequate natural light, and an Article 4 direction removes the right entirely — several London boroughs have them over their town centres and office cores.
Since April 2023 a commercial property cannot be let below EPC E without a registered exemption, and that applies to continuing tenancies, not just new ones. The government had proposed an EPC C milestone for 2027, and a large amount of advice given over the last two years assumed it was coming.
That milestone was dropped. The confirmed target is EPC B by 2031, and only for buildings over 1,000 square metres. Below that threshold the minimum stays at E. The seven-year payback test and the existing exemptions survive, and the change still requires secondary legislation. If a building is being priced as though it becomes unlettable in 2027, that is out of date — and if you are buying, it may be a discount that no longer has a basis.
Part 2 of the Landlord and Tenant Act 1954 gives most business tenants a statutory right to renew unless the lease has been contracted out. The Law Commission concluded in June 2025 that the contracting-out model should be kept, and published a second consultation in June 2026, which closed on 16 September 2026.
The proposals under consideration would extend the short-term exclusion from six months to one or two years, remove periodic tenancies from protection, and replace the current contracting-out procedure with prescribed warning wording inside the lease itself — no separate statutory declaration beforehand. Ground F would expand to cover retrofit as well as redevelopment, and Ground G would allow a landlord to carry out works before occupying.
Class E covers shops, offices, restaurants, gyms, clinics, nurseries, indoor sport and light industrial, and you can move between any of them with no planning application. Sui generis uses — pubs, bars, nightclubs, takeaways, cinemas, live music venues, betting shops, petrol stations — sit outside it and need a full application for almost any change. It is the difference between a building you can repurpose in a week and one where you are at the mercy of a planning committee, and it shows up in the price on exit as well as in what you can do while you are there.
Structurally, a great deal. There are now five multipliers rather than two: 38.2p and 43.0p for retail, hospitality and leisure below and above £51,000 rateable value, 43.2p and 48.0p for everything else, and 50.8p for any property at £500,000 rateable value or more. The top rate is a cliff edge applied to the whole rateable value, so a property just over the line pays materially more than one just under it. The retail, hospitality and leisure discount that used to be claimed annually is now built into the multiplier instead.
No. That milestone was dropped. The confirmed target is EPC B by 2031, and only for buildings over 1,000 square metres — below that the minimum remains EPC E, which has applied to all commercial lettings since April 2023. The change still requires secondary legislation. If someone is pricing a building around a 2027 deadline, they are working from superseded guidance.
Commercial property is exempt from VAT by default, but an owner can elect to waive that exemption — opt to tax — in order to recover VAT on their own costs. If they have, 20% goes on top of the purchase price or the rent. On a purchase that also increases the SDLT, because SDLT is charged on the VAT-inclusive consideration. It is recoverable if you are VAT registered and making taxable supplies, and a real cost if you are not. We ask at the outset because finding out at exchange is how deals fall over.
It depends on which side of the table you are on and how much the location matters to the business. Inside the Act you have a statutory right to renew, which protects goodwill you have built in a location; outside it you leave at the end of the term unless the landlord chooses otherwise. Landlords often insist on contracting out, and in return you should be asking for something — a longer term, a better incentive, or a tenant break. The Law Commission is consulting on reform, but nothing has changed, so negotiate on the law as it stands.
