Renting a new office is a major milestone and an exciting time for any business, whether it’s your first office or a move to a larger office space. Maybe you’re thinking about moving to a new, up and coming area in London or perhaps you can’t wait to get a bespoke flexible office space. Whatever office you’re looking for, it’s easy to get swept up by the inspiring workspaces on offer and forget about the additional costs that many offices come with.
If you’re on the hunt for your next office space in London, it’s essential to be aware of the hidden costs of renting an office space. To give you a hand with your search, we’ve put together some of the most common hidden expenses of renting an office. This guide will provide you with all the information you need to be prepared before signing on the dotted line.
Four hidden costs of renting an office space in London
If you're planning to rent office space in London, there are four key hidden costs that you want to keep an eye out for. While the monthly rent may seem like the most significant expense, other fees, taxes and costs can really add up.
Business rates
You’re probably familiar with business rates if you already rent office space. But if you’re searching for your first office space, you might be in the dark about what business rates are and how much they cost.
Put simply, business rates are a local tax paid for any property used for business or a non-domestic purpose. The rates apply to a range of commercial buildings, including:
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- - Offices
- - Pubs and bars
- - Shops
- - Warehouses
- - Factories
Business rates vary from borough to borough, making them tricky to work out. Fortunately, the UK Government’s website has a handy calculator. Business rates are calculated by multiplying your annual rental costs (Rateable Value) by a rate multiplier. This means that the cost of your office space has a direct effect on your business rates.
So, if you’re looking at office space in Westminster, where the average cost per square foot of office space is £61.75, you’ll pay higher business rates than in Hackney, where the average is around £35 per square foot.
This is why it's always good to check out the business rates before signing a lease for new office space.
Utilities
Utility bills are everybody’s favourite topic at the minute, right? If you’re considering a new office space, you’ll have undoubtedly thought about utility bills. It’s part and parcel of every property, commercial or domestic. But if it’s your first office, you may not be familiar with the different bills you need to pay. Most businesses will need to consider the cost of:
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- - Electricity
- - Gas
- - High-speed internet
- - Water rates
- - Phone lines
If you’ve found the perfect London office space to rent, look at the average costs of the above bills to get an idea of how much you’ll need to set aside each month. You don’t want to be halfway through a working day and have your electricity cut off.
Furniture and facilities
Modern offices are more than just a place for your team to sit at their desks for eight hours a day. They’re all about collaboration. But even if you’re planning on running a reasonably traditional office, you’ll still need to furnish it. Desks, chairs and other standard office equipment can be expensive so take the time to calculate costs before signing anything.
But if you’re planning on running a more contemporary office, you’ll need more than just desks and chairs. With hybrid and agile working becoming the norm, a modern office is a place for collaboration and creativity. But for collaboration and creativity to thrive, you need the furniture and facilities to create a productive setting to nurture it.
At the very least, your team will need a kitchen area to make tea and coffee. But to really get the most out of your office space, you should consider breakout areas, meeting rooms and communal spaces to boost productivity and encourage collaboration. If this is something you’re interested in for your team, be aware of any extra charges for using meeting rooms and communal spaces when you’re looking for a new space.
Long leases
The needs of your business can change significantly over a short period of time. Maybe you’re rapidly expanding and need a bigger office space, or perhaps you’re looking to downsize. Whatever it is, it’ll be a struggle if you’re tied to a long lease.
Long leases can be an excellent option for businesses, but if your business grows, you may be paying for an office space that is too small. This can mean you’ll need to find a second office to accommodate your growth which can be pricey.
When you’re searching for office space, look carefully at the length of the lease and try to anticipate your business’s growth over that period. It’s also important to check the terms of your lease for early termination clauses and charges and see if there’s any flexibility in your agreement. A good tip is to look for office space providers that have experience in helping growth businesses and how they can help to potentially reconfigure space as required.
Avoid the hidden costs with an all-inclusive office space
As you can see, there are quite a few hidden costs to keep on top of when renting office space in London. Ensuring that you pay all of your office fees is essential but it can be tricky with bills due at different times. This can be risky and make cash flow management more difficult for businesses.
One of the best ways to find office space without hidden fees to manage is to look for all-inclusive and serviced offices in London. All-inclusive offices include all four of the hidden costs in a single, monthly payment. With an all-inclusive office, you no longer have to worry about setting half a dozen reminders to pay bills and rates throughout the month, you can do it all in one easy payment.
Over the last decade, serviced offices in London have become a popular option for businesses of all sizes. They offer companies a range of benefits, including:
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- - Fixed monthly, all-inclusive payments – Your monthly rental cost includes the cost of the office, business rates and utilities, including high-speed internet.
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- - Furniture is included – Serviced office providers ensure that you have all the furniture your business needs. Plus, if you already have furniture, they’re happy to store the provided furniture for free.
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- - Freely available meeting rooms and breakout spaces – As part of your monthly payment, you get access to breakout areas, communal spaces and meeting rooms so your team can get creative at no extra expense.
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- - Flexibility – Serviced office providers understand that your office demands change, so they build flexibility into your contract. This means if you need a bigger office, you don’t need to wait out a long lease to expand. We also offer short term leases to suit your needs.
About Canvas
At Canvas, we have a great selection of offices for rent in London. Our offices are designed with a focus to maximise creativity and productivity. Every Canvas office is available with flexible, fixed monthly contracts that include access to meeting rooms, communal facilities and breakout areas at no extra cost.
Plus, we know that your office space should work for your business, which is why we can tailor our offices to your needs. Get in touch with us today to find out about our creative office spaces in Shoreditch, Old Street, Dalston, Farringdon, Mayfair and Clerkenwell.
