The budget contains significant business rates support for retail, hospitality and leisure (RHL) properties in England. From April 2027, the Small Business Rate Relief thresholds will increase to £18,000 for 100% relief and £21,000 for tapered relief, with around 70,000 businesses expected to be removed from business rates altogether. Qualifying RHL properties will also benefit from a two-year real-terms freeze, with half of all RHL properties in England expected to pay no business rates and around 110,000 businesses seeing bills fall next year. Pubs and clubs will also receive a further 20% discount on their rates, bringing that to 35% following earlier reliefs announced by the government.
What the changes could mean for investors
For investors, the significance goes beyond the immediate reduction in occupational costs. Business rates form part of the overall cost of occupying premises and can influence tenant demand, covenant strength and the viability of individual locations. Reducing that burden could improve affordability for occupiers and help support tenant retention, particularly on high streets where operating margins remain under pressure. In turn, that may affect investment performance. If the measures contribute to lower vacancies or stronger tenant resilience, landlords could benefit from more secure income and potentially greater investor confidence in affected assets.
Supporting investment in underperforming assets
While rates relief will not resolve the structural challenges of weaker locations, the budget's wider emphasis on reducing planning constraints and supporting the reoccupation of empty properties (particularly following the mixed responses it received in the ‘Business Rates and Investment: Call for Evidence’) provides some optimism that investors' ability to reposition or redevelop underperforming assets will improve.
Visit our built environment blog for more key information on the Autumn Budget 2026.
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