20 January 2017 
Cheryl Pick, Projects and Engagement Manager
Dear members
I attended the British Property Federation meeting last December in London.
We discussed
I would be interested to know if anyone submitted a response on the HMO licencing consultation.
Extension of business rates
The move towards business rates as the main source of funding for local government has understandably incentivised local authorities to maximise this source of revenue. One of the ways to do this is to broaden the tax base (i.e. the number of properties within the charge to it), and in that regard some authorities have proposed that business rates should be extended to student landlords.
While we understand the driver behind this (after all, property owned by student landlords benefits from some local authority services), extending business rates to what is essentially domestic property is fraught with difficulty and should not be undertaken lightly.
Firstly, it is important to remember that business rates (or non-domestic rates, to give them their proper name) are not designed for properties in which people live for any significant length of time. Business rates policy over the last 25 years has developed based on that underlying assumption and extending the tax to certain categories of domestic property would entail a thorough revision of the existing rules.
Secondly, over the past decade student accommodation providers have built tens of thousands of homes for students, freeing up the houses they otherwise would have been living in for families or young professionals. Business rates would strike a devastating blow to this sector, decimating future investment and hampering the ability of the real estate industry to contribute towards solving the UK’s housing crisis.
Thirdly, there are myriad practical difficulties. Should business rates apply to all student landlords or only to some? If the latter, where do you draw the line – and what discrimination might you be creating? What constitutes a hereditament in a residential property context? On what basis should they be valued? What about where students share accommodation with non-students? What would the impact be on the UK’s thriving university sector?
Ultimately, levying business rates on any form of residential property would severely discourage further investment in it, which is the last thing we need given the country’s dire need for more homes and the government’s ambitious commitments to deliver them.
Regards
Mark
Mark Q Swales MSc FInstLM
Director of Estates and Facilities
Facilities Directorate
Sheffield Hallam University
City Campus
Sheffield S1 1WB
Telephone +44 (0)114 225 5555
Direct line +44 (0)114 225 3575
Mobile 07711 616059
E-mail m.swales@shu.ac.uk
