Having listed buildings of historical or architectural importance can be a benefit for an independent school, in terms of prestige and reputation. But they can also be a liability.
The costs and challenges of upkeep and maintenance are usually high. Schools may face planning obstacles if it decides it wants to convert a listed building in order to alter its use.
With the 2017 Rating Revaluation looming, a key question is whether or not these additional costs can be offset by rates reduction? Property Aspects Magazine posed that question to two property experts; Paul Giness, of The Beattie Partnership and Gail Stoten of Pegasus Group.
“Schools with listed buildings face unique challenges,” observes Paul, “because in effect they may not have a choice whether or not to undergo refurbishment.”
Upkeep and Obligations
“Listed buildings can come with certain constraints when it comes to converting or refurbishing them,” Gail points out. “At the same time, the likelihood is that these kinds of buildings will require a certain mandatory level of upkeep, which incurs extra expense.”
Alterations to listed buildings often require planning permission and separate Listed Building Consent, usually accompanied by assessment reports. This all contributes to additional costs for maintaining listed school buildings.
“Heritage adds status, but it also has a price,” Gail explains. “This should be reflected in the rates a school pays.”
Can Schools Take a Rates Break?
In the recent past, many rating agents worked on the assumption that if a building was undergoing refurbishment, they could apply to take it out of rating for the duration of the works.
The continuing Newbigin (VO) v Monk case has questioned this assumption. The Valuation Office (VO) states, in its updated practice guidelines, that if the property is deemed to be in a state of “reasonable repair” then a reduction is unlikely.
“There is the question raised in the VO’s guidelines about whether the cost of repairs is economic,” Paul points out. “Given that schools with listed buildings may face building costs that are typically higher than the norm, this should really be up for discussion.”
If the entire site being refurbished is listed, the issue is straightforward, because vacant listed properties are exempt. Where a listed building forms part of a larger, non-listed site, then the exemption will not be automatically granted.
Paul and his team are looking into this issue. This is particularly as schools with listed buildings may not have a choice about undertaking refurbishments, and therefore face additional costs for upkeep and maintenance.
Property Aspects Magazine appreciates the contributions of Gail Stoten and Paul Giness.