How Much Does a Commercial Lease Really Cost?

Leasing commercial premises involves more than just paying rent. You’ll need to consider a package of costs—covering legal fees, rent deposit, SDLT, ongoing outgoings, and potential landlord charges. Here’s a detailed guide to help you prepare. 

1. Rent & Rent Deposit

  • Rent: The most significant cost. It’s set per square foot and paid quarterly in advance. In prime locations, expect high upfront costs; smaller or less central properties may offer flexibility with monthly payments  
  • Deposit: Often demanded as 3–6 months’ rent, held as security against non-payment or damage  

2. Stamp Duty Land Tax (SDLT)

  • Applicable on leases where the total lease value exceeds £150,000. 
  • Rates start from 1%, rising to 2% for premium rents over £5 million  

3. Legal Fees & Disbursements

Legal advice is essential for negotiating and reviewing lease terms—on obligations, break clauses, repair liabilities, and service charge caps. 

Typical solicitor fees: 

 

  • Landlord or Tenant: Between £1,000 and £2,500+, depending on lease complexity  
  • Some firms offer fixed fees between £1,000–£1,500 + VAT for straightforward leases; more complex arrangements may cost £1,500–£2,500+ 
Disbursements can include: 

 

  • Land Registry registration fees (£40–£910 depending on lease term)  
  • Search costs (local authority, land charges, environmental): typically £300–£500  
  • SDLT charting, where applicable  

4. Business Rates, Utilities & Insurance

  • Business rates: a tax based on rateable value—can add around 40% to rent costs  
  • Utilities: Tenants typically pay gas, electricity, water, and broadband  
  • Insurance: Tenants often insure their own contents (and improvements), while building insurance is recovered through service charges  

5. Service Charges & Maintenance

In multi-tenancy buildings, tenants pay service charges covering communal area cleaning, security, repairs, and shared utilities. Maintenance duties depend on lease type (full repairing and insuring vs. internal only). 

6. Additional Costs 

Licence to assign, sublet, or alter
£1,000–£5,000+, typically £1,000–£1,500 + VAT.
Professional reports
Building survey report £400–£500.
Energy Performance Certificate (EPC)
Required by landlords and occasionally charged to tenants.
Landlord’s legal costs
Often payable by the tenant, typically £1,000–£3,000+.

Summary Table

Cost Type  Typical Range 
Rent  Market-dependent, paid quarterly 
Rent Deposit  3–6 months’ rent 
SDLT  1% to 2%, only if lease > £150k 
Solicitor Fees  £1,000–£2,500+ + VAT 
Land Registry Fees  £40–£910 
Search Fees  £300–£500 
Licence (assignment/alteration)  £1,000–£5,000+ 
Building Survey  £400–£500 
EPC  Varies—landlord or tenant may pay 
Business Rates & Utilities  Ongoing, variable 
Service Charges  Depends on property 
Landlord’s Legal Fees  £1,000–£3,000+ 

 

Why Costs Vary

  • Complexity: Negotiated terms, planning compliance, multiple landlords. 
  • Location: London/London suburbs can attract higher legal rates. 
  • Lease term and value: Longer/renegotiated leases increase SDLT and legal work. 

Tips to Budget & Negotiate

  1. Request fixed-fee quotes covering legal and disbursements. 
  2. Negotiate service charge caps to avoid escalating costs. 
  3. Factor in business rates relief, e.g., small business exemptions. 
  4. Include a dilapidations or condition report to avoid future repair disputes. 
  5. Get quotes for licences early, especially if subletting or altering. 

Final Takeaway

Leasing commercial property in the UK involves considerable upfront and ongoing costs. 

  • Expect legal fees of £1,000–£2,500+ plus VAT and disbursements. 
  • Additional charges include rent deposit, SDLT, search fees, and professional surveys. 
  • Ongoing outgoings—business rates, utilities, insurance, and service charges—add significantly to your operational cost. 

 

With transparent guidance, a proactive solicitor, and careful budgeting, you can navigate the true cost of leasing with confidence—and avoid surprises down the line. Need help getting quotes or advice on securing value in your lease? We can help—just get in touch.