From 1 April 2026, the Valuation Office Agency (VOA) has updated rateable values across commercial property in England and Wales.
This is particularly relevant for landlords seeking to terminate protected tenancies under the Landlord and Tenant Act 1954 (the Act).
When is compensation payable?
The Landlord would be required to pay compensation where they end a tenancy via a Section 25 notice or oppose a tenant’s renewal under a Section 26 notice, on the following “no-fault” grounds (section 30(1) of the Act):
- termination is required as re-letting the whole (rather than part) would yield a higher rent (ground (e))
- termination is required as the landlord wishes to redevelop or reconstruct (ground (f))
- termination is required as the landlord intends to occupy the property for their own business or residence (ground (g))
How is compensation calculated?
Compensation is tied to the rateable value at the date notice is served:
- standard compensation = 1 x rateable value
- if the tenant or their predecessor to the same business has been in occupation in excess of 14 years = 2 x rateable value
Key takeaway
If rateable values have increased, so has potential compensation exposure.
A Landlord should be aware of this when deciding whether they wish to serve a notice to terminate a lease or oppose a lease renewal on non-fault grounds.
If you would like any advice on the upcoming changes, please do not hesitate to get in touch with our team.
(March 2026)