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Commercial property indices?
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Tim D
Posted: 20 November 2024 16:33:29(UTC)
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Joined: 07/06/2017(UTC)
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I'm helping out a relative with some historic tax stuff. They've needed to estimate valuations of some properties at various points in the past (specifically 1985 & 1998; NB not the usual magic March 1982 "CGT rebasing" date).

For residential properties this is as easy as going to
https://www.nationwide.co.uk/house-price-index/
and rolling back from the disposal price and date to what it'd have been at the date of interest. We've done that before and their accountant has been happy to accept that as an estimate of book cost for CGT calculations.

But one of the properties was a shop (ie commercial/retail), and I am dubious that it's sensible to use the Nationwide's residential house price index data for that.

Any idea if there's any (free!) equivalents to the Nationwide house price index data, but for commercial properties (likely broken down by office/retail/industrial sectors, and of course by region)? I can't find anything; I get the impression there must be something locked away behind paywalls at RICS or CBRE (who certainly seem to be able to put out plenty of commentary on short term price trends.)
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Sara G
Posted: 20 November 2024 17:30:56(UTC)
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I don't know if this would be acceptable as evidence, but there are charts on the last page of this report showing the commercial property index going back far enough to cover those dates. With a bit of effort and approximation (and your own exemplary charting skills!) it might be possible to start from the most recent sale valuation and work back.

https://www.bankofenglan...rum-twenty-years-on.pdf

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Tim D on 21/11/2024(UTC)
bearcub
Posted: 20 November 2024 18:41:12(UTC)
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A quantity surveyor or commercial agent (like CBRE) would be your best bet, as they'll have access to the RICS index.
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Tim D on 21/11/2024(UTC)
Tim D
Posted: 03 December 2024 16:09:12(UTC)
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Joined: 07/06/2017(UTC)
Posts: 8,883
The charts idea seemed quite promising thanks... but then Googling around for better versions led to the "IPD UK Annual Property Index" and it's "Capital Growth" index and "All Retail" subsector.

Amazingly I was able to find relevant index values for 1985 & 1988 in tables in a spreadsheet at http://web.archive.org/web/20030601000000*/http://www.ipdindex.co.uk/downloads/indices.xls . That only went up to 2002 but fortunately a number for January 2014 was lying around at https://www.msci.com/doc...-45d8-9d8f-71a9cc8ed2ed

That's yielded five figures in CGT savings vs. what the accountant would have done if we'd let them. Ain't internet archaeology wonderful. Of course ideally my relative would have had documentation of the value of the tranches of shares handed over to them when they received them... but if such ever existed they're lost it in the mists of time. Going through this sort of exercise even with a live relative who can answer questions is certainly a reminder of what a total nightmare the abolition of Capital Uplift On Death and the imposition of CGT on deceased's estates would be!

Just looking at the capital growth rates implied by the calculations over the multiple decades from 1985 to various disposal dates and it was 5-6%pa for residential properties using the Nationwide house price index data (none of them were in the bubbly south east) and 3.4%pa for the shop. Seems plausible.
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2 users thanked Tim D for this post.
Sara G on 03/12/2024(UTC), Jonathan7 on 21/12/2024(UTC)
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