The Property.Works Price Calculator is an algorithm designed to help businesses find the right commercial property based upon their requirements and rental budget. Commercial properties have costs in addition to the rent paid to your landlord, that are often hidden at the outset of a lease. The PWPC uses an array of data sources that are based on real life information to help you know which properties fit your specification. Conversely, the PWPC can tell you how much a particular property will cost over the course of a year.
We’ve believed for some time that the pricing regime in commercial property has been opaque and not helpful for businesses who need to understand how much cash will leave their bank account each month as a result of leasing a particular property. Traditional use of “per square foot,” “per week” or “per person per month” pricing has been designed confuse tenants and make pricing opaque. It’s our goal to end this practice and help businesses to understand just how much properties cost, all-in, for a month or a year.
This algorithmic process uses a number of data points to create a price estimate. Specifically, they are:
The PWPC asks you to include a base annual rent, if you leave this blank, we will calculate an estimate for you based on median pricing for the other factors you include:
Quoted rent is the asking price that an agency or landlord puts on an ad for a particular property. It is often presented as ‘per square foot’ but can be presented in other ways as well. This is the amount that a tenant pays the landlord each month for the use of the property itself. In the PWPC we ask you to enter this, however it is not required. If you do not include a quoted rent, the PWPC algorithm will find properties based on the other criteria you enter and use the median quoted rent of those properties in the final PWPC calculation of yearly total costs.
Business rates are the property tax levied by the local council on occupancy of a non-domestic property. For a specific property, the rates are worked out based on the “rateable value” of that property as declared by the Valuation Office Agency (VOA). The PWPC uses the median rateable for similarly sized properties in the specified location. The actual Rates payable by you is obtained by multiplying a specific “multiplier” to the rateable value.
The multiplier is dependant on whether the property is in England, Wales, Scotland, Northern Ireland or the City of London (which has a slight premium). Additionally, any business relief to rates are then deducted to get the final rates payable by an occupier of a commercial property.
Most small business (property with a rateable value below £51,000, or having a business only in a single property) are eligible to a Business Rates Relief, but you should contact your local council or the Valuation Office Agency for details.
A service charge is the fee that a landlord levies on an occupier in order to cover maintenance and upkeep of the property. This includes any structural repairs, cleaning, lighting, security, common areas, utilities or other services provided by the landlord for the tenants in a particular building. The exact terms covered varies and must be clarified with the lettings agent at the time of leasing.
A lease premium is a non-refundable lump sum payment made by the tenant to the landlord upon signing the tenancy agreement. There are a number of reasons for a premium being attached to a property including: if a property is in a desireable area, rent is below market rate, or there are fixtures and fittings that come with the property (ie kitchen equipment) etc.