How to Rent Property?


Searching for a Commercial Property to Let

When searching for a commercial property to rent, you should aim to meet your current and foreseeable business needs. Searching for the ideal property can be undertaken by yourself or by us through our acquisition service. There will be a fee should you appoint us to assist in the acquisition but this could be money well spent if you are not experienced in acquiring commercial property under a lease.

The Right Location for Your Commercial Property

Choosing a suitable location for your business is crucial, whether you need to be in an out–of-town retail park, industrial estate or the middle of the city. The location is important as it can affect the suitability of a property for the business, its clients, customers or employees.

Entering Into a Licence as a Commercial Property Tenant

With a high degree of flexibility offered, licences could be highly beneficial to start-up businesses, as it may not be possible to forecast sales volumes, activity levels and space requirements over a long term. It could also be highly advantageous if you are a small business and are looking for short-term property solutions, such as serviced offices, additional parking arrangements or setting up a temporary shop (i.e. Christmas shops). A Licence is an ideal agreement to cover this type of situation.

Use Classes and Planning Permission for Tenants

Commercial properties are covered by The Town and Country Planning (Use Classes) Order 1987, which divides the uses of business premises and land into different categories.
Use Classes Use Classes Description General Development
Order 1987 Order 1972 Order 1988
A1 Shops Class I Shops, retail warehouses, hairdressers, undertakers, travel and ticket agencies, post offices, dry cleaners, etc Pet shops, cats-meat shops, tripe shops, sandwich bars Showrooms, domestic hire shops, funeral directors No permitted change
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A2 Financial and Professional Services Class II Banks, building societies, estate and employment agencies Professional and financial services, betting offices Permitted change to A1 where a ground floor display window exists
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A3 Food and Drink Restaurants, pubs, snack bars, cafés, wine bars, shops for sale of hot food Permitted change to A1 or A2
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Sui Generis Shops selling and/or displaying motor vehicles Permitted change to A1
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Launderettes, taxi or vehicle hire businesses, amusement centres, petrol filling stations No permitted change
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B1 Business Class II and Class III Offices, not within A2, Research and development studios, laboratories, high tech Light industry Permitted change to B8 where no more than 235sqm
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B2 General Industrial Class IV-IX General industrial Permitted change to B1 or B8 B8 limited to no more than 235 sqm
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B8 Storage and distribution Class X Wholesale warehouse, distribution centres, repositories Permitted change to B1 where no more than 235 sqm
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Sui Generis N/A Any work registrable under the Alkali, etc. Works Regulation Act, 1906 No permitted change
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C1 Hotels Class XI Hotels, boarding and guest houses No permitted change
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C2 Residential Institutions Class XII and Class XIV Residential schools and colleges Hospitals and convalescent/nursing homes No permitted change
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C3 Dwelling Houses N/A Dwellings, small businesses at home, communal housing of elderly and handicapped (Six or less residents unless living together as a family.) No permitted change
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Sui Generis N/A Hostel No permitted change
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D1 Non-residential Institutions Class XIII, Class XV, and Class XVI Places of worship, church halls Clinics, health centres, crèches, day nurseries, consulting rooms Museums, public halls, libraries, art galleries, exhibition halls Non-residential education and training centres No permitted change
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D2 Assembly and Leisure Class XVII and Class XVIII Cinemas, music and concert halls Dance, sports halls, swimming baths, skating rinks, gymnasiums Other indoor and outdoor sports and leisure uses, bingo halls, casinos No permitted change
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Sui Generis Class XVII Theatres No permitted change

Rental and Additional Costs for Commercial Property Tenants

When you rent a commercial property, there are several costs that need to be taken into account:

Rental Costs
Fees for Professional Advisers (Surveyors, Solicitors)
Business Rates
Others costs involved: insurance, repairs, maintenance, running costs or Service charge (lighting, heating, any cleaning services etc), Stamp Duty Land Tax (SDLT), deposit…

Business Rates Information for Tenants

Business rates are a local tax that is paid by the occupiers of a non-domestic property in England and Wales.

Business rates are calculated by multiplying the rateable value of the property (which is given by the VOA) by a factor set annually by the government, known as the multiplier. The multiplier is also known as the uniform business rate, which is set by Communities and Local Government in England and Welsh Assembley in Wales.

Stamp Duty Land Tax (SDLT) Information for Tenants

Stamp Duty Land Tax (SDLT) is charged on property and land transactions including rents (leases) in the UK, where the value exceeds certain thresholds.

Please click on the link to see the current rates.

Submitting an Offer on a Commercial Property

When you have found the property that meets your business needs, and you’ve undertaken a comparison of prices in your chosen location, you are ready to submit an offer. This is usually submitted via your agent Next Property Commercial. We will offer you advice if your offer is rejected for a new counter offer.

The landlord can accept or decline your offer.

‘Heads of Terms’ (HOTS)

Any proposed transaction begins with drafting a document, which clearly states the primary terms that both parties have agreed to; a ‘Heads of Terms’ (HOTS).

This means that both parties will only be subject to the comprehensive agreements that are described within the main contract. When both parties agree the HOTS, the legal work can begin.

The HOTS can be a complicated task and Next Property Commercial will draw up the Heads of Terms. By using Next Property Commercial with our years experience, we can advise on the best Heads of Terms to put forward.

Local Searches for a Commercial Property

These searches provide research on what has happened and what may happen to a particular property and the surrounding area. The majority of commercial property transactions will require Local Searches to be undertaken as part of the conveyancing process. The main purpose of the Searches is to look into any plans that may affect the property and to ensure there will be no unpleasant surprises and hidden-costs after you have rented the commercial property.

Commercial Property Lease Agreements for Tenants

There are two different types of commercial property rental agreements. You can rent a commercial property by obtaining a lease (for a fixed period of time), or entering into a Licence.

Exchange of Contracts and Completion

Completion is usually one month after the initial Exchange of Contracts.