Commercial Property FAQ for Small and Medium Businesses

Whether you are searching for your first business premises, renewing an existing lease, or wondering whether you are getting a fair deal, this FAQ gives you plain-English answers to the questions small and medium businesses ask most about commercial property.

Finding Space

How do I find commercial property to rent in the UK?

The main routes are commercial property portals (Rightmove Commercial, Zoopla Commercial, CoStar), local commercial agents, and direct approaches to landlords. However, not all available space is publicly listed — many landlords let space before it reaches the portals, and agents do not always market every vacancy actively.

RE:match works differently: you post your requirement, and landlords and agents with matching space respond directly to you. This is particularly useful if you have a specific requirement and want to reach motivated landlords quickly.

What should I include in a property search brief?

The more specific, the better. A useful brief includes: property type (office, industrial, retail, warehouse, other), size in square feet or square metres, location (town, area, or specific radius), required term and flexibility needs, any specification requirements (EPC rating, power supply, loading, car parking), and your budget range including rates and service charge. A specific brief attracts more relevant responses.

What is the difference between leasehold and freehold commercial property?

Most commercial businesses rent on a leasehold basis — they take a lease from the freehold owner (landlord) for a fixed term and pay rent. Freehold means owning the property outright. Buying freehold commercial property is a significant capital commitment; leasing preserves capital and provides flexibility. Some growing businesses buy freehold through a pension (SIPP) or a limited company, which can be tax-efficient.

What is a commercial property agent and do I need one?

A commercial property agent markets and lets commercial properties on behalf of landlords. As an occupier, you can instruct your own agent to find space on your behalf — this is called a tenant's agent or occupier agent. Alternatively, you can search directly and deal with the landlord's agent. Having your own adviser means someone is acting in your interests, not the landlord's.

Costs

What does commercial property cost?

Commercial property rents are usually quoted per square foot per annum. Rents vary enormously by location, type, and specification — from under £5 per sq ft for secondary industrial in regional markets to £80+ per sq ft for Grade A office space in central London. Beyond rent, you will pay business rates, service charge (in multi-let buildings), and utilities. Total occupancy cost is often 50–100% higher than the headline rent.

What are business rates and how much will I pay?

Business rates are a tax on the occupation of commercial property. They are calculated by multiplying the property's rateable value (set by the Valuation Office Agency) by the national multiplier. As a guide, business rates are often 40–50% of the rent, though this varies significantly. Small businesses occupying a single property with a rateable value below £15,000 may qualify for small business rate relief — up to 100% relief for properties below £12,000 RV.

What is a service charge?

If your property is part of a multi-let building or managed estate, a service charge covers the cost of maintaining shared areas, building fabric, insurance, and management. It is usually charged annually and reconciled against actual spend. Ask to see previous years' accounts before agreeing to a lease with a service charge.

What deposit will I need to pay?

Most commercial landlords require a deposit equivalent to three to six months' rent, held as security against the tenant's obligations. Deposits can sometimes be replaced by a rent guarantee from a director, a parent company guarantee, or a bank guarantee — particularly for businesses without an established trading history.

What is a dilapidations liability?

At lease end, the landlord can claim the cost of returning the property to the condition it was in at the start of the lease, less fair wear and tear. This can be significant — tens of thousands of pounds in some cases. To limit your liability, agree a schedule of condition at the start of the lease — a photographic record of the property's condition when you take it, which caps what the landlord can claim at the end.

Leases

What is a typical commercial lease length for a small business?

There is no fixed norm, but five-year leases are common for small businesses; ten-year leases with a break at year five are common for medium businesses. Shorter terms (two to three years) are available but less common and typically carry less landlord investment in incentives. Flexibility — in the form of break clauses — is usually more valuable than a short initial term.

What is a full repairing and insuring (FRI) lease?

The most common type of commercial lease. Under an FRI lease, the tenant is responsible for keeping the property in good repair throughout the term — including structural repairs in some cases — and pays for building insurance (usually through the service charge or directly). This is a significant obligation; understand what you are taking on before signing.

What is security of tenure?

Security of tenure under the Landlord and Tenant Act 1954 gives a business tenant the right to renew their lease at the end of the term. A landlord can only refuse renewal on specific grounds (redevelopment, own occupation, persistent non-payment). Many modern commercial leases are "contracted out" of the 1954 Act, which removes this protection. Check your lease carefully.

What is a rent review?

Most commercial leases contain a rent review clause — usually every three or five years — allowing the landlord to review the rent to market level. Many leases are upward-only, meaning the rent can only stay the same or increase at review. Open market rent reviews are based on comparable evidence; where you disagree with the landlord's assessment, you can appoint your own surveyor to negotiate.

What does "contracted out" mean?

A lease that has been granted outside the security of tenure provisions of the Landlord and Tenant Act 1954. This means you have no automatic right to renew at lease end. Contracted-out leases are common and not inherently problematic, but you should understand the difference and what your options are when the lease expires.

Can I make alterations to my commercial premises?

Usually yes, with landlord consent. Most leases allow alterations subject to the landlord's approval, which cannot be unreasonably withheld for internal, non-structural works. You will typically need to reinstate alterations at lease end unless the landlord agrees otherwise. Getting consent in writing, before you start, is essential.

Negotiation and Rights

Can I negotiate on commercial lease terms?

Yes — all commercial lease terms are negotiable, including rent, rent-free period, break clauses, service charge provisions, permitted use, deposit, and fit-out contributions. The outcome depends on market conditions and the relative motivation of each party. In the current market, tenants have more leverage than they have had in several years.

What incentives can I ask for?

Rent-free periods (three to twelve months depending on lease length), stepped rents (starting lower and rising to the full amount over one to two years), a landlord contribution to fit-out costs, a rent deposit reduction, and a break clause are all legitimate asks. In motivated landlord situations, several of these may be available together.

What is a break clause and should I ask for one?

A break clause gives you the right to end the lease early at a specific date, on notice. It is one of the most valuable lease provisions for a small business because it limits your exposure if circumstances change. Landlords often resist them; in the current market, they are more willing to concede them than in recent years.

Do I need a solicitor and a surveyor?

For any lease of material length or value — which means most commercial leases — yes to both. A commercial property solicitor reviews the legal terms and your obligations. A chartered surveyor advises on market terms, negotiates the commercial deal, and protects your interests on rent reviews. The cost of professional advice is almost always recovered in better terms.

RE:match and Finding Space

What is RE:match and how does it work?

RE:match is a reverse commercial property marketplace. Instead of searching portals and waiting for agents to respond, you post a brief describing the commercial space your business needs. Landlords and agents who have matching space respond directly to your requirement. It is free for occupiers and takes a few minutes to post a brief.

What types of property can I find on RE:match?

All types of commercial property — offices, industrial units, warehouses, retail, leisure, and mixed-use. RE:match works across the UK and is particularly effective for reaching landlords with available space that has not yet been widely marketed.

What should I include in my RE:match brief?

Property type, size, location, timing, and any specific requirements. The more specific your brief, the more relevant the responses you will receive. Include your preferred lease length and any flexibility requirements — landlords and agents can then confirm whether their available space matches your needs before getting in touch.

Post your requirement on RE:match — it takes a few minutes and costs nothing. Landlords and agents with matching space respond directly to your brief at rematch.co.uk.