Rating Manual section 6 part 3: valuation of all property classes

Section 630: markets and market places (other than livestock markets)

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

This section deals with markets, street markets, stalls, street trading and similar pitches used for sales and promotions.

It does not deal with Livestock Markets (which are covered by Rating Manual section 6 part 3- section 580 although it should be noted that certain markets, especially those with origins in mediaeval times, include the right to bring livestock to market (although nowadays this right is seldom, if ever, exercised).

It does not deal with Car boot sales, intermittent outdoor sales fairs and similar events (including summer sales fairs, fêtes, and similar events). These are covered in Rating Manual section 6 part 3 - section 187.

2. List description and special category code

2.1 Markets and Market Places

For Market Places that result from the right to hold a Market (however this arises), Special Category Code (SCat Code) 165 should be adopted. The relevant suffix letter will be S as markets are a “Specialist” Class. Responsibility for ensuring effective co-ordination of SCat 165 assessments rests with specialists.

The Special Category Code (SCat), Primary Description Codes (P Desc Code) and primary descriptions available for markets and market places is as follows:

SCat Code: 165 – Markets (Other than Livestock) P Desc Code: CM, using the default primary description of “Market Outdoor and Premises”, or P Desc Code: CM1, using the default primary description of “Market Indoor and Premises”.

The default primary description should not be overwritten.

2.2 Stalls, Street Trading and Similar Pitches used for Sales and Promotions

Individually assessed Market Stalls, street trading and similar pitches used for sales and promotions would use SCat Code 427, with the suffix letter of G.

The Special Category Code (SCat), Primary Description Code (P Desc Code) and primary description available for Market stalls, street traders and pitches used for sales and promotions are as follows:

SCat Code: 427 – Pitches for Stalls, Sales or Promotions P Desc Code: CX, and the default description overwritten to: “(Site of)* (Market)* Stall / Pitch /Promotion* and Premises”.

*Delete or overwrite with actual use (but not the user or company name) as necessary.

3. Responsible Teams

3.1 Markets and Market Places

Valuations for markets and market places in one assessment are a specialist class. They are typically made as rental valuations using a percentage of Gross Receipts as comparator.

Requests for Information should be made on forms of return (FOR) as appropriate; FOR VO6028 has been specifically devised for use with markets and market operators, (for the avoidance of doubt the VO 6028 should not be used for individual stallholders, where the VO6003 is appropriate).

3.2 Stalls, Street Trading and Similar Pitches used for Sales and Promotions

Valuations of individual market stalls, street trading and similar pitches used for sales and promotions are a Generalist class.

Requests for Information should be made on forms of return (FOR) as appropriate; FOR VO6003 is appropriate for Stalls, Street Trading and Similar Pitches used for Sales and Promotions.

3.3 Two occupiers operating on the land in question

Where there are two rateable occupiers in respect of the land on which the market is held, typically a car park with a market, responsibility for making the assessment in the relevant rating list remains with specialists, even if the car park element has a higher rental value than the market operator. It is therefore vital that effective liaison occurs between specialists and generalists in the Units at all stages: this includes list compilation, maintenance and when assessments are challenged.

4. Co-ordination

4.1 General

The Markets Class Co-ordination Team (CCT) has high level responsibility for the co-ordination of this class. The CCT is responsible for examining the approach to making valuations for markets. The CCT will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists.

The framework for co-ordination is shown in Rating Manual section 6 part 1. Additionally, and where available, this class is subject to the co-ordination procedures outlined in the appropriate practice notes attached to Rating Manual section 6 part 1.

5.1 Types of markets

It is important to establish that a “market” only provides “the right to hold a concourse of buyers and sellers”. It is fundamental that the right to hold a “market” is distinguished from and not confused with the “market place”, where buyers and sellers actually meet to exercise their right to hold the market. The right to hold a market is generally not rateable without a market place. The market place should always be carefully considered to see whether there is rateable occupation.

Where there is no right to hold a market, a market place in the strictest sense cannot exist, and therefore what looks and sounds like a market place may instead be a collection of traders in a single geographical area, a typical example being certain street markets.

A Glossary of terms can be found at paragraph 10 and should assist caseworkers in their understanding of the relevant case law. Often a fine distinction in the facts produces a very different outcome and it is recommended that the Glossary of terms be referred to both in its own right and alongside consideration of the contents of this section and relevant case law.

General or provision markets, which may be either retail or wholesale, differ widely in character but normally fall within one of the following categories:

a.a number of stalls and booths erected in an open market place removed and re-erected on each occasion that the market is held (perhaps only one or two days per week).

b.a number of stalls in a defined uncovered market place, each stall occupying a regular site but not necessarily being dressed and manned every day of the week.

  • a number of stalls each occupying a regular site on a street or highway, so that together they could be described as a street market.
  • covered market halls within which the stalls occupy permanent positions and may be let on terms which could arguably lead to the making of separate assessments for each stall (see 5.13 below).
  • the super development of the type of market referred to in d. above where spaces are allocated within a large shopping hall (perhaps part of a larger complex). The question of separate assessments may need to be considered.

5.2 Provision of markets

The majority of markets falling within categories a. and b. above are controlled by local authorities, as are the stalls in category c. However, some remain in the ownership of market companies and private individuals.

For various authorities available to establish a market, see 5.4-5.6 below.

5.3 Rateability

No difficulty should arise in establishing rateability of markets where the market place falls within categories d and e above. However, insofar as categories a. and b. are concerned, careful consideration needs to be given as to under what authority the market is established and whether the four tenets of rateable occupation as set out in J Laing & Son v Kingswood AC [1949] 1KB 344 have been satisfied. Finally, the unit of assessment needs to be ascertained following the established rules set out in Gilbert (VO) v Hickinbottom & Sons Ltd [1959] 2 QB 240.

A street market (category c. above) will need to be examined to establish whether a market exists or merely a collection of street traders. Where identified, a market place should be considered the rateable hereditament in the first instance, but if it emerges that there is no rateable occupation of the market place, or where there is no market place at all, the individual stalls should be examined against the four tenets of rateable occupation (see below), and assessed as appropriate.

5.4 Background - Older Markets

Older markets were established under the following;

  • A local Act of Parliament
  • The terms of an ancient charter
  • Letters patent
  • Prescription

From the close of the twelfth century to 1516 the King’s grants of franchises were made by charter, and from then on grants were made by letters patent. Charters are documents of a more strictly formal nature than letters patent. Since 1846 very few grants of market rights have been made by the Crown. All of these grants are recorded in the Charter Rolls and Patent Rolls deposited at the Records Office.

If the charter or letters patent is expressed as having been granted by the Crown with Parliament’s assent, or by similar wording, strictly this is in the nature of a private or local and personal Act of Parliament.

In the event of the lack of formal grant, the right to hold a market and/or take tolls can be assumed by prescription or usage. A market can be created by immemorial user, that is it has been held from before legal memory (the beginning of the reign of Richard 1 in 1189) or whenever evidence is given of uninterrupted modern user (long user) a prescription is raised of enjoyment from time immemorial. A user for 20 years, if uncontradicted, may be sufficient to raise such a presumption.

5.5 Background - More Modern Markets

More modern markets have been established under statute, and rights so acquired are much less likely to be called into question than franchise rights acquired by charter, etc.

The Food Act 1984 authorises local authorities to establish or acquire markets within their boundaries. S53 gives market authorities the power to demand such charges/tolls as they may determine. This means that, unlike the situation in Newham v Hampsher (VO) [1970] LT RA 365 below, they can charge for stallage and tolls. The need therefore remains in each case to determine whether the charges are in the nature of a stallage charge or not. Rateablility on the highway may therefore arise under this legislation (as with the 1955 Act below).

Earlier powers had arisen under The Food and Drugs Act 1955, amended by the Local Government Act 1972. These included giving certain local authorities powers to establish a market, and to acquire by agreement or lease existing markets, market rights and tolls.

Street selling is regulated by the Local Government (Miscellaneous Provisions) Act 1982. Schedule 4 covers both licences and consents to trade in fixed streets/locations. Schedule 5 applies to walkways and to pedestrianised and other non-vehicular highways. Authorities may place objects or structures on, in or over these highways to give effect to pedestrianisation. Of particular importance is the right to restrict access of the public over the highway.

5.6 Market franchise

A market franchise must be distinguished from the market place where the market is held. A conveyance or lease of the market place will not normally transfer the franchise, as market place and franchise are distinct properties. The owner of the franchise need not own the land upon which the market is held.

5.7 Rateable occupation - general

When dealing with markets and market places, it is important to correctly identify the rateable occupier having paramount control of the particular market or market place concerned.

Consider the four basic ingredients for determining whether an occupier is in rateable occupation as developed in the decision of the CA in J Laing & Son v Kingswood AC (1949) KB 1 All ER 224.

  • Actual occupation
  • Exclusive occupation
  • Beneficial occupation
  • Occupation for not too transient a period.
  • Physical extent and elements within etc.,
  • Licences/leases etc
  • Inspections (on the ground)
  • Nature of occupation/management and control

5.8 Actual occupation

Actual occupation in its simplest form can mean the physical presence of the occupier on the land. It can also mean the acts by which the occupier makes use of, or even controls land. Legal possession (the legal right to occupy) is not enough to satisfy the rating test of actual occupation. Whether or not a person is an (actual) occupier is a matter of fact and not law. It is what happens “on the ground” that matters, “ The existence of legal possession thus understood is mainly, if not entirely, a question of law; the existence of actual possession is mainly, if not entirely, a question of fact.” (R v St Pancras Assessment Committee (1877) 2 QBD 581; 46 LJMC 243; 25 WR 827).

5.9 Exclusive occupation

Occupation must be exclusive for a particular purpose. A rateable occupier should have the right to carry out the purpose of his or her occupation without anyone else on the premises doing the same thing.

Exclusivity means that there can only be one rateable occupier for a particular purpose. If there is more than one occupier for a particular purpose then one or other must be in paramount occupation.

In the case of markets, a rate cannot be avoided because the market is only held on certain days of the week.

In Williams v Overseers of Wednesbury (1890) Ryde Rat App (1886- 1890) 327, the appellant was in exclusive occupation of the market for two days in the week which was enough to confer rateability.

In Roberts v Aylesbury Overseers (1853) 1 E&B 423; 22 LJMC 34, it was decided that the stallholders occupation would be too fleeting to render them liable, but the operators were as “tenants for a term of years, of what is in effect the use and occupation of the soil of the market place, on particular days, to be turned to profit in a particular manner.”

In Hall (VO) v Darwen Borough Council and Silcock Bros. (Amusements) Ltd (1957) LT 51 R&IT 9; 2 RRC 329; (Amies RA Vol 29 – 1958 p 40), the Borough Council licensed the company ‘to occupy and use for the purposes of a fairground’ certain vacant land owned by the corporation. By the terms of the licence the company were to hold (and did hold) at least two fairs each year. The company had the prior right to use the land at any time, although the Borough Council could use the land when it was not required by the company. The Lands Tribunal held the company to be in rateable occupation.

Pennard Golf Club v Richards (VO) (1976) LT RA 203 involved a golf course on land which was subject to commoners grazing rights and was also traversed by public footpaths which created a nuisance and led to trespassing on the course. It was held that the occupation by the golf club was exclusive for their purposes. No other person was in rateable occupation of the golf course and, in so far as the exercise of the commoners’ rights may be said to be a competing occupation of the land, it was clearly subordinate.

In Renore v Hounslow London Borough Council (1970) QBD RA 567: it was held that three car parking spaces allocated by a local authority to a company at a parking site were in the separate rateable occupation of the company .The spaces were marked ‘reserved’ and were entered through swivel bollards to which the company had the key. This was notwithstanding that their use was given up after six months – the use had started in the expectation that it would continue indefinitely.

When markets are held on land which at other times is used for different purposes questions of exclusivity and paramountcy arise. In these cases it is more usual to find that one of the occupiers has overall paramount control and occupation. This is likely to apply whether the uses are simultaneous or consecutive. An example might be a car park used one day a week for holding a market. In this instance the value of the market (assuming payment is, or can be regarded as being in the nature of a stallage toll) is reflected in the value of the car park.

5.10 Beneficial occupation.

The occupation of the property must be of some benefit or value to the rateable occupier. This does not mean that it must be profitable, other reasons may include fulfilling a statutory requirement or some other special need of the occupier. The question really is whether anyone would be prepared to pay a rent for the property, and in the case of public authorities it may be assumed that they will be prepared to pay a rent in order to secure the land/buildings.

Hare v Overseers of Putney (1891) 7 QBD 223: where a toll bridge was purchased by the Metropolitan Board of Works and opened to the public free of toll, MBW were not rateable occupiers of the bridge, the bridge being kept up for the benefit and use of the public and MBW had no power to do anything to or on the bridge except keep it for the benefit of the public.

Lambeth Overseers v LCC (1897) AC 625: where LCC purchased a park under a special Act and maintained it for recreational purposes. Held that the public had the right to use the park in perpetuity and LCC were not in occupation. The land was “struck with sterility” as no one could derive a greater benefit from it than anyone else.

In order for a market to be rateable, there has to be beneficial occupation of land, which means that benefits or payments are enjoyed in connection with the occupation of land.

The law is summed up by Lush, J., in Faversham Navigation Commissioners v Faversham Union (1867) 31 JP 822:

“A toll itself is not a rateable subject, but if a toll is payable in respect of the use of land, and where the occupier of land acquires thereby a right or power to receive tolls, their occupation is taken into account in estimating the rateable value to the land.”

It was decided in R v Nicholson (1810), 12 East 330 that tolls have to be connected with the land to be rateable and it is therefore necessary to distinguish between different classes of tolls in a market.

Payment made for stalls or standing places (stallage) or pens for animals (pennage) in a market, or for making holes in the ground for support (piccage) are profits of the soil and hence rateable. Payment may not necessarily be for each stall, but may be in respect of a separate portion of the market place specifically allotted for the sale of certain types of goods.:

Franchise tolls are payments usually made in respect of the entry of goods into the market and/or goods sold in the market place and as such are incorporeal and do not fall to be assessed. An example of a franchise toll is scavage or shewage, which is a toll paid for a licence to show or expose wares. Such a toll is not in the nature of compensation paid to the owner of the soil for the use of the soil, in other words paying such a franchise toll does not bring with it the right to occupy land in the market place.

By way of further illustration, In Horner v Stepney Assessment Committee (1908) 24 TLR it was held that the appellant who was in occupation of a covered market place and of adjoining streets was rateable in respect of sums received for stallage but not in respect of tolls paid by people bringing goods within the market limits (i.e. in streets adjoining the covered market place but within the market limits) whether such persons were stall holders or not.

In R v Casswell (1872) QBD LR 7 QB 328: the distinction between “franchise” or “market tolls” and “stallage tolls” was emphasised stating that it is established law “that tolls payable merely as market tolls for the use of the market are not rateable, whereas the toll paid for the use of a stall which occupies the soil is rateable.” In this case a toll was paid simply for admission to the market place and not for the use “of any shed or other thing erected or maintained upon the soil.” The toll was therefore held to be a market toll and not rateable.

London Corporation v St Sepulchre London Overseers (1871) QBD LR 7 QB 333 was decided on the same basis, where cattle were driven into a market and not stalled, they did not occupy the soil more than a living person walking into the market and carrying provisions.

Finally, in the previously cited Bedford (Duke of) v Overseers of St Pauls Covent Garden (1881), 51 LJMC 41; 45 LT 616; 46 JP 581; 30 WR 411 it was held that what had to be decided was whether the toll was received “in respect of some user of the soil beyond the mere entry to the market which was enjoyed in common by all the rest of the public…. in effect payments directed by statute in respect of some use of the soil beyond that mere use of the market which the rest of the public and the other vendors enjoy. The test is occupation or use of the market beyond that which the general public have – some standing room in it distinct from an entrance into it.”

It is not necessary that the payments are not paid in respect of a single stall for each stallholder so long as a distinct portion of soil is allotted. A payment is stallage if there is a single stall for each stallholder or a comparatively small portion of the market allocated to a certain number of stallholders by a sort of tenancy in common. It is considered enough if the payment is made for some standing room in the market, distinct from a mere entrance into it.

In Oswestry Corporation v Hudd (1966) CA 1 All ER 490, the Corporation owned and occupied an enclosed cattle market, authorised by local Acts of Parliament which empowered them to take tolls on all cattle brought into the market and the VO sought to rate the tolls. The issue was whether tolls received from those who use the market are to be taken into consideration in arriving at the assessment of the market for cattle. By the wording of the local Act that established the market, the toll was a franchise toll. A distinction was drawn between “the market”: a right to hold a concourse of buyers and sellers. The market confers on the public a right to attend it. In its formal sense the market is a local monopoly right in the nature of an incorporeal hereditament commonly originating from the sources mentioned earlier. “The market place”: the place where the concourse is held.

In interpreting these Acts, the Court of Appeal decided that whilst there were pens or stalls provided and no doubt cattle taken to market used them, there was just one charge for entering the market and this had to be paid with no further charge leviable. The pens were provided to all users of the cattle market but not appropriated to any particular dealer or user. Such pens were provided as part of the normal market amenities and for its better administration.

A franchise/market toll is paid on goods brought to market whether they are sold or not. Payment of the tolls does not confer on the payer any right or privilege over any other attending the market. However, if anyone wants to have a stall or specific standing or area then this is a privileged position of special occupancy which he cannot have unless he has permission from the owner of the soil. If the owner requires payment for such a grant then this must be paid for –this is a profit of the soil and is rateable.

Newham London Borough Council v Hampsher (VO) (1970) RA 365: the issue was whether a street market was rateable and consequently whether the ratepayers were the beneficial occupiers. It was decided that they were not as there was no evidence to suggest an intention to establish a market under the Food & Drugs Act and no intention to establish any rights to charge stallage tolls, therefore there was no profit derived from the soil and hence no beneficial occupation. Trading was governed by the West Ham Corporation Act of 1931 and did not allow stallage to be charged.

It is quite clear that each case depends very much on the terms of the grant or the statute which gives the right to enforce and collect tolls and what actually happens on the ground. It follows that where land is dedicated for the perpetual use of the public, and cannot therefore be used for any profitable purpose, it will be exempt from rating.

In summary, if the toll on an open market is not in the nature of a stallage or piccage toll and is in fact a franchise toll it is not rateable and is to be disregarded when making an assessment.

It is worth sounding a note of caution inasmuch as a toll may be called a franchise toll but is in reality and practice a stallage toll. Care should be taken to establish the nature of payments made in respect of tolls and charges and terminology within relevant documentation should not necessarily be accepted on face value. Further investigation must be made to determine the true nature or identity of the toll or charge.

Charges made by the occupier of a market for admission can be incidental to the use of the soil if they cannot be shown to be derived from a franchise. Such rateable tolls will include charges made to the public for entry to the market place.

The burden of proof lies with the person who claims that the payment is a franchise toll (Percy v Ashford Union 1876 LTNS 579).

5.11 Occupation for not too transient a period.

There must be a necessary degree of permanence and to be rateable the occupation of the land comprising the hereditament must exist for not too transient a period. Consideration should be given not only to the length of occupation but also to its character and nature.

In Roberts v Overseers of Aylesbury (1853) 1 E&B 423, the court did not appear to take notice of the fact that the occupation of the lessee in respect of the stalls (rateable) was intermittent, being limited to market and fair days.

In the previously mentioned Hall (VO) v Darwen Borough Council and Silcock Bros. (Amusements) Ltd (1957) LT 51 R&IT 9; 2 RRC 329; (Amies RA Vol 29 – 1958 p 40), holding two fairs a year, coupled with an agreement conferring the right to hold fairs over a reasonable period was enough to establish rateable occupation. (The emphasis here should be on the “right” to hold two or more fairs, not necessarily the seven year licence.). The fact that they had the right over a reasonable period and exercised the right only twice was enough, coupled with the right to occupy more times if desired and subject to fourteen days notice. The rateable occupier in this case was the operator and not the owner of the site.

In Liverpool Corporation v Huyton-with-Roby Urban District Council (1964) QBD RA 43; 10 RRC 256: the corporation, as owner of the land, was held to be in occupation and not the caterer/fairground proprietor who used it for a specified two week period in any year. In this case the fairground proprietor had no permission, agreement or right (as in Hall v Darwen above) but depended upon an application, which the ratepayers could grant or withhold at their absolute discretion. Even with only a two week per year fairground agreement, where a separate request is needed prior to any event so that absolute (or paramount) control rests with the corporation, the occupation itself is not too transient and therefore the corporation found to be liable as rateable occupier.

Hobbs (VO) v Madden (1994) RA 79 concerned a flower stall which frame was screwed to the wall and rested on the surface of the shopping mall. In deciding whether the stall comprised a rateable hereditament, it was considered that it was enjoyed with the land and enhanced its value and had sufficient degree of permanence and attachment. Length of occupation is not a conclusive test of permanence but is a factor to be taken into account. The test is whether there is sufficient permanence to amount to beneficial occupation. Finally, the title or right to occupation is immaterial to the question of permanence; the precarious nature of a right to occupy does not in itself prevent that occupation possessing a sufficient degree of permanence to be rateable.

In terms of moving a market/fair around the site, this is not considered necessarily at odds with permanence of occupation as long as the site is sufficiently defined and reasonably considered to be the hereditament. In Thomas v Witney Aquatic Co Ltd (1972) LT RA 493, a floating clubhouse moored for the summer months on a lake, whilst in occupation, but moved to a different part of the lake in winter, was held to be rateable as part of the lake hereditament.

5.12 Markets on a Highway.

The case that most clearly illustrates the situation concerning markets held on a highway is Newham LBC v Hampsher (1970) LT RA 365, and the key question that has to be asked is how was the market established i.e. under what authority.

In general, all markets will be rateable whether or not the market place is on a highway, as long as the four tenets of rateable occupation are satisfied. For example, if the market has been established under the Food Acts, these allow for stallage to be collected and would indicate that there is rateable occupation.

If street trading or trading on the highway has been established under a local Act (or under the regulations governing street trading), then rateability must be explored in the context of the licences and consents granted under these provisions. As they are merely forms of street regulation they seldom grant a quality of occupation adequate to be regarded as a rateable market place. The public has an unrestricted right of admission and statutory restrictions are often placed on the charges that may be made for regulating street trading which allow councils only to recoup their costs. This means that in such cases beneficial occupation of a street market will seldom be found to be present.

Markets whose market places are located on the highway are rateable if it is possible to show that the rights of the general public over the land have not exhausted all value. The mere grant of a licence does not confer a proprietary interest, which can only be granted if the “operator” owns the land.

Unless market tolls, charges, etc are being charged under some charter, etc, a local authority are not the owners merely because they exercise powers to licence and control street trading. In order for there to be rateable occupation some positive acts of occupation are necessary, over and above those exercised as custodians of the public.

In this context, it is important to note that if a highway is dedicated subject to the right to obstruct for limited purposes (e.g. to permit a market thereon) the occupier of the market will be rateable even though the occupation of the market place is intermittent - and at other times the public is not excluded from those areas occupied by stalls, etc.

Similarly, where a market has been held for centuries and the dedication of the highway post dates it, it should be assumed that the market has a legal origin and that the land was dedicated as a highway subject to the existing right to a market (Williams v Overseers of Wednesbury (1890) Ryde Rat App (1886- 1890) 327).

Where, however, an individual street trader has a marked position on which to place a stall on the highway, the four tenets of rateable occupation may be satisfied. The occupation is likely to be beneficial and the trader prepared to pay a rent. Where this is established, the site of the stall should be considered to be a separate assessment.

5.13. Unit of assessment: a rateable market with a market place or individual stalls?

5.13.1 Where rateability is established in the case of markets falling within categories a. and b. of paragraph 5.1, it is unlikely that any question of the separate assessment of individual stalls will arise. In Roberts v Overseers of Aylesbury (1853) 1 E&B 423, Coleridge J said

“The persons here rated are not those who on market days use the stalls from time to time and make payments to the appellants for such use. Their occupation probably would be too fleeting to render them properly rateable. But the persons rated are the tenants for a term of years, of what is in effect the use and occupation of the soil of the market place, on particular days, to be turned to profit in a particular manner.”

5.13.2 Where stalls are regulated on an individual basis and there is no authority to hold a market as might be the case in category c. of paragraph 5:1, then it is not appropriate to assess the market place. It should be noted however that each stall should be considered on its own merits to establish whether rateable occupation exists.

5.13.3 Separate assessments for individual stalls may also be appropriate in categories d. and e. of paragraph 5.1.

Traditional market halls described in category d. typically offer a range of types of occupations; these can be:

  • permanent units (such as a fishmongers or butchers) positioned around the walls of a market hall,
  • permanent shuttered stalls used by the same occupier year in and year out and left stocked overnight,
  • pods or units in the same position week by week, resting only on their own weight but with the potential to provide some degree of permanence to a person in occupation for a reasonable period of time, and
  • temporary stalls erected and dismantled each day.

Brook (VO) v Greggs PLC and others (1991) LT RA 61 provides some guidance in respect of the treatment of covered markets, determining on the facts that Manchester Arndale Centre Market should be split into separate assessments. Brook was determined by application of the principles laid down in J Laing & Son v Kingswood AC [1949] 1KB 344 (see paragraph 4 above) and Westminster CC v Southern Railway Co (1936) HL 24 RIT 278 (see paragraph 5.13.6 below) to the facts, where it was found that separate assessments of individual stalls was appropriate.

As far as more modern developments envisaged in category e. are concerned, there has been an increase in this type of retail trading premises. These typically involve the conversion of an obsolete large shop into an indoor market with a number of individual ‘stalls’ sometimes including a food store and cafeteria. Also included would be modern local authority market halls open 5 or 6 days a week with stalls/units/kiosks permanently occupied and stocked. The owners of these premises will normally seek a single assessment of the whole on the basis that they are in ‘paramount control’. The facts on the ground must therefore be carefully considered in each case.

5.13.4 It is not possible to prescribe ‘hard and fast’ rules to arrive at the correct assessment in every case since no two sets of facts are likely to be exactly the same. In most cases the arguments will be fairly evenly balanced and it will be necessary to ascertain sufficient facts and evidence to arrive at a reasoned conclusion. There are two inter related tasks which need to be addressed:

  • to determine who is in rateable occupation, and
  • to identify the correct unit of assessment.

5.13.5 In determining who is in rateable occupation, the matters most likely to be of relevance are those of:

i.exclusive possession and ii.the degree of permanence.

In respect of the former, it is necessary to look at the individual trader’s licence and ascertain whether the terms provide such substantial control to the licensor as to enable him effectively to interfere with the licensee’s day-to-day conduct of his retail trade. Examples of typical controls include restrictions on trading hours, enforced opening, price control, restrictions on types of goods sold, display requirements and specification of trader’s standard of dress and behaviour.

5.13.6 Although some licence terms may appear restrictive, they may be no more than those required for the proper management of the market. In the case of Westminster CC v Southern Railway Co (1936) HL 24 RIT 278 although the Railway Company controlled the access and egress to the shops and the tenants had to abide by the Company’s bye-laws, it was held that the tenant was still in sole occupation of his premises and that the controls were “merely restrictions on the tenant’s user and enjoyment”. Therefore the Tribunals and the Courts will not merely look at the terms of the agreement but are likely to focus on the factual occupation as it is in practice.

5.13.7 When considering the question of transience and the permanent nature of a retail unit, the case law points to it being a question of fact. It is necessary for VOs dealing with indoor markets to obtain information about the physical characteristics of the units, the number of licensees who have been moved from their initially allocated space, the character and cost of the fittings which they have fixed to their units and the period during which they have occupied their units. The necessity for thoroughly detailed research and analysis of the evidence is emphasised.

5.13.8 Having determined the rateable occupier, identification of the correct unit of assessment should logically follow (e.g. if the rateable occupier is the market operator, then the market in its entirety probably forms a single unit of assessment). If the facts surrounding the occupation of individual stalls point to the market traders as being the rateable occupiers, there is case law to support the assessment of individual stalls (see Assessor for Strathclyde Region v Guardian Royal Exchange Properties Ltd. 32 S.L.T (1992), Brook (VO) v Greggs PLC and others (1991) LT RA 61 and Midland Development Group of Companies Ltd v Strathclyde Region Assessor).

5.13.9 If it is determined that each market trader is in rateable occupation of his allocated space, it is necessary to consider the remaining rateable parts of the property to establish whether a “residual hereditament” exists. In the case of Brook (VO) v Greggs (1991), the member, having found that the stalls were separate rateable hereditaments, decided without argument presented that all the remaining parts occupied by the City Council, including the loading bay, boiler house refrigeration room, passageways etc, should form a single assessment. Given the lack of argument it must be open to doubt whether all of these areas were in rateable occupation such as to render them collectively a separate hereditament. VO’s minded to follow this approach will need to be certain of their ability to establish overall rateability on the facts.

5.14 Right to exclude other markets

5.14.1 Authority to hold a market often bring with it the right to exclude other markets. In the case of charter markets, this is considered to be a radius of around six and two thirds miles. Sometimes an authority waives its right to enforce this position for a fee from the other market (or car boot sale) seeking to operate within this radius. However it may equally enforce its right and prevent the competing car boot sale or market from operating within the ‘exclusion zone’.

5.14.2 In The Appeal of Ash (VO) (2009) LT RA 12, the Lands Tribunal member agreed that the right to exclude other markets was more likely to enhance the subject market’s value rather than reduce it.

5.15 Tolls

5.15.1 Tolls are not rateable per se, but if a toll is payable in respect of the use of land, and where the occupiers of the land acquire through their occupation or earlier grant a power to receive tolls, then the benefit of the tolls can be taken into account in estimating the rateable value of that land.

5.15.2 If there is any doubt as to the rateability of a market, or where the Valuation Officer has included tolls in his or her valuation and their inclusion is disputed, a full report, together with a copy of the authority establishing the market, should be submitted to the technical adviser.

6. Survey Requirements

All markets and sites for stalls pitches and promotions should be investigated before assessments are altered or brought into rating lists. The facts must be ascertained before altering or making new assessments.

6.1 Preliminary Judgement

In every case, an early judgement should be made regarding whether a new or changed assessment is likely to arise. This should be based on readily available local information and will also be expected to include a brief inspection whilst the market is taking place. The extent and content of information at the market will indicate both the frequency and duration of the market in question.

6.2 Seek Further particulars

Once rateable occupation seems probable, the operator should be asked for further particulars.

This approach should always be made in writing and also explain that the reason for the request is to assist in the consideration of the rateability of the land being used for the particular market and to seek the authority under which the market operates and the receipt and rental information. The appropriate form of return (FOR) should be sent as appropriate (See section 3 above).

6.3 Inspection

It is important to conduct a more detailed site inspection at this stage. During the inspection, whilst the market is taking place, all relevant factual information should be obtained. A note should be made about the weather on the day of inspection and photographs taken where possible, whether the market is held indoor or outdoors.

All relevant facts should be recorded about the operation of the market over the last year or so. These will include:

  • Details of when the market takes place – (months of year, days of week, hours of day),
  • Numbers of stalls or pitches used/available
  • The area of land (and buildings) used for the market and for buyers/visitors car park, clearly marked on a plan (with a note as to whether areas vary on different days/seasons/ etc),
  • Type of barriers to these areas- e.g. fences/walls/markers/nothing
  • Measurements (Gross Internal Areas) of any buildings occupied by the market,
  • Make a note of the weather on the day of inspection,
  • Take photographs where possible and appropriate.
  • Name, address and telephone number of the operator

7. Survey Capture

All relevant notes and checklists should be captured on EDRM as appropriate. Photographs should be placed on RSA.

8 Valuation Approach

8.1 Rentals method

Where, in the light of all the circumstances, it is necessary to raise separate assessments for individual stalls, the rentals method will almost certainly be appropriate. Rents paid by market operators to run markets on behalf of local authorities are available. When adjusting rents, it is important to establish whether any rates and services provided by the landlord are included in the rent and correct adjustments made. Similarly, care should be taken when relying on rents paid by market trader in a market considered as one overall assessment, as the rents may require adjustment to take the rent/rates equation into consideration. These and other considerations in respect of the adjustment of rents are covered in more detail in the appropriate Rental Adjustment Practice Note, contained in section 4 part 1 of the Rating Manual. The adjusted rent may be expressed as an area (in m2), number of stalls or as a percentage of gross receipts, depending on the facts on the ground and the best devaluation of comparable evidence in order that it can be best used to value comparable markets elsewhere.

For a useful example of the application of the rentals method, in The Appeal of Ash (VO) (2009) LT RA 12, the Lands Tribunal considered the valuation approach for an historic charter market operating in a town centre in Knaresborough, North Yorkshire. The market, operated by the local town council every Wednesday, was in a part of the town used for highway/parking on other days of the week.

On the facts of the case, the LT confirmed a rentals/comparison approach using a percentage of gross receipts was appropriate when making the valuation. The basis was derived from an examination of and comparison with rental and assessment evidence from similar outdoor markets in North Yorkshire.

Where the unit of assessment consists of the whole market, any rent paid must be investigated to ensure that it was negotiated at arm’s length. A rent paid to a local authority as landlord should be afforded careful consideration since the priority may be a desire to provide a service to the community rather than to obtain an economic rent. It is expected such a rent would be adjusted upwards and/or given less weight than a true economic or “market” rent.

It is often found that a rentals approach using gross receipts as a comparator establishes or confirms a relationship between the rental value and gross receipts and confirms or underpins a scheme of valuation.

8.2 Receipts and Expenditure (or ‘profits’) method

In the absence of reliable rental evidence and, where necessary, as a check upon the suitability of a rent as a guide to the assessment, it may be necessary (except in the special circumstances referred to in sub-paragraph 8.3 below) to have recourse to a receipts and expenditure (or profits basis) valuation (see Section 6 part 2)

Generally, where a private individual or company is in occupation of a market, it may be presumed that the motive for occupation is the making of a profit (but see Thrapston Market Company v Newton (VO) 1968 LT RA 415).

As indicated above, where the occupier is a local authority, their primary motive may be the provision of a market to benefit the community as a whole. The principle of “hidden benefit” was recognised and approved by the Court of Appeal in Morecambe and Heysham BC v Robinson (VO) (1961) CA 1 All ER 721; RVR 137) which related to a foreshore undertaking. In respect of markets, the Lands Tribunal has recognised that the local authority may be prepared to pay a rent substantially in excess of that thrown up by a profits basis valuation and make an “overbid” to secure possession and ensure the continuance of the market. (See Taunton Corporation v Sture (VO) (1958) LT 51 R & IT 749; Hereford Corporation v Taylor (VO) (1960) LT 53 R & IT 771; Oswestry Corporation v Plumpton (1962) LT RVR 44).

Where the occupier is not primarily motivated by the need to make a profit, the accounts may show an income which is sufficient only to meet outgoings. A positive answer from a profits basis approach can be obtained, therefore, only by adjusting some of the items in the accounts to a level more consistent with commercial practice. Such adjustments approved by, or made by, the Lands Tribunal include: -

a. in the Taunton Corporation case, the reduction of central administration expenses used in the ratepayer’s valuation and an increase in the figure for fees paid by auctioneers using the market;

b. in the Hereford Corporation case, confirmation of the Valuation Officer’s addition of 15% to the actual tolls received, even though it was argued on behalf of the ratepayer that the tolls being charged at the relevant date were the maximum that the Minister of Housing and Local Government would then permit.

It is often found that a rentals approach using gross receipts as a comparator is preferable, particularly as rating lists become settled over time (in 8.1.above). In such instances a relationship between the rental value and gross receipts often emerges and confirms or underpins a scheme of valuation.

8.3 Contractor’s basis

A contractor’s basis valuation was before the Tribunal on each of the Taunton Corporation, Hereford Corporation and Oswestry Corporation cases. In the Taunton case the Tribunal “did not think that a percentage on adjusted capital cost would figure in the discussion” between landlord and tenant. Similarly, in the Oswestry case, the Tribunal was of the opinion that “only to a very secondary extent indeed” would a tenant “consider any figure thrown up by a percentage on capital value”. In the Hereford case, where many of the buildings were modern, the Tribunal was prepared to admit the contractor’s basis for “investigation and consideration”.

The contractor’s basis is not considered, therefore, to be appropriate in the valuation of markets. Its use may, however, be justified in the special circumstances of a newly constructed market in a position where the potential of the market cannot be gauged until it has been in operation for some time. (See Melville and Rees (VOs) v Airedale and Wharfedale Joint Crematorium Committee (1963) LT 10 RRC 27; 3 RVR 201).

9. Valuation Support

Valuations for markets and market places are typically made on the rentals comparison basis where the comparator is gross receipts. They must therefore be made using the Non-Bulk Server (NBS), which contains a specific application tailored for Markets and Market Places.

Valuations of individual market stalls, street trading and similar pitches used for sales and promotions should be performed on the Rating Support Application (RSA), which contains a bespoke scale tailored for their use. This is expected to form the basis of any Valuation Scheme. This scale should not be used in respect of market places in one assessment, which should be valued using the NBS.

10. Glossary of terms

Market - The right to hold a concourse of buyers and sellers

Market Place - The place where buyers and sellers meet (a concourse) to exercise their right to hold a market

Market Stall - An area within a market place from which a person can set out his stall to the exclusion of others

Market Trader - A person who has the right to bring and offer goods for sale at a market (whether from a stall, pen or pitch is immaterial)

Street Trader - A person who has the right to trade on the highway (whether or not from a designated pitch), and where it is likely no right to hold a market exists.

Charter Market - A market granted by Royal Charter, often in mediaeval times. Sometimes referred to as a “franchise Market”, but in most cases the tolls levied in modern times are in the nature, character and quality of stallage tolls and should therefore be taken into account when assessing rateable value.

Prescription Market - A market right established by passage of time.

Statutory Market - A market right established or confirmed by Act of Parliament.

Street Market - Can look and feel like a “market place”, but may in fact not be a “market place” at all if there is no actual right to hold a market. A street market is therefore often a collection of regulated street traders (Newham v Hampshire (1970) refers).

Market Tolls - Typically used as a general or generic term to encompass all “tolls” or “charges” levied in respect of a market: these include franchise, stallage, piccage, pennage, places for fairs or buildings and rents. In many cases, such “market tolls” are to be taken into account when determining rateable value as they involve occupation of land.

Franchise Tolls – Often a broad expression used to describe all “Market Tolls”, but this is not correct. An example of a franchise toll is scavage or shewage, being a toll paid for a licence to show or expose wares. Such tolls are paid in respect of (and proportionate to) goods brought to a market (whether sold or not) but payment of a franchise toll will not bring with it any exclusive space within the market. Examples of market franchise tolls in action are £1.00 per cow, £0.75 per sheep, £0.25 per goose, 2 handfuls of grain from each standard sack, etc. brought to market. Modern equivalents are difficult to envisage now that the majority of town centre markets no longer deal with livestock. However, it may be argued that modern day “wandering sales persons” pay franchise tolls. One such example is a balloon seller, who makes a payment to walk around the market showing his wares, but has no exclusive pitch or stall. However, on closer examination, even a payment made by a wandering balloon seller would only be a true franchise toll if the balloon seller paid an amount proportionate to the number of balloons (or per balloon) brought to the market, which is unlikely. If the balloon seller paid a fixed sum that was not in any way related to the number of balloons he or she brought to market, such a fixed payment is in the nature of an entry fee and would normally be taken into account when determining the RV (see below). However, it remains the case that, once established as such, tolls levied in the nature of franchise tolls are generally not to be taken into account when determining the rateable value.

Stallage - Paid for an exclusive area of the market on which a market trader can set up his stall (or use one already provided). Tolls levied in the nature of stallage are normally taken into account when determining the rateable value.

Piccage - Paid for an exclusive pitch, historically marked by a stake (or “pick”) in the ground, from which a market trader can offer his goods for sale (No stall is set up). Tolls levied in the nature of piccage (or pickage) are normally taken into account when determining the rateable value.

Pennage - Paid for a pen or enclosure for livestock, used by a market trader to the exclusion of all others. Tolls levied in the nature of pennage are normally taken into account when determining the rateable value.

Entry Fee/Charge (Trader) - Paid by a trader for entry to sell goods (e.g. land used for a car boot sale), but not dependant on amount of goods brought etc. Such fees normally, but not exclusively, apply where there is no right to hold a market (therefore no “market place” exists in the strict sense) and should be taken into account when determining the rateable value. If there turns out to be a right to hold a market, traders will invariably pay a market toll in the nature of franchise or stallage etc, and not pay an entry fee/charge. An exception to this would be payment by the wandering balloon seller mentioned in the definition of “Franchise Tolls” above, where an Entry Charge is made for entry to a “market place”. Whether or not the right to hold a market exists, entry fees or charges are normally taken into account when determining the rateable value.

Entry Fee/Charge (Public) - Paid by members of the public for entry to a sale of goods (e.g. land used for a car boot sale). Such fees normally only apply where there is no right to hold a market (therefore no market place exists in the strict sense) and should be taken into account when determining the rateable value of land used for such a purpose. If there is a right to hold a market, the public will in the majority of cases have a right to attend it freely, and not pay an entry fee/charge. Whether or not the right to hold a market exists, entry fees or charges are normally taken into account when determining the rateable value.

Practice note 1: 2017 - markets and market places (other than livestock markets)

1. Market appraisal

1.1 Introduction

The National Association of British Market Authorities (NABMA) represents market operators throughout the United Kingdom. The majority of its members are local authorities and, as such, the organisation is in a position to assess the general performance of markets and local authority markets in particular. NABMA have considered the changes in the ten years between 2004 and 2014, and it has contributed to the contents of the market appraisal paragraphs in this note.

Between 2004 and 2014, NABMA has been responsible for commissioning various forms of research with regard to the markets industry and these have been recognised by government and other national agencies as being of significant value in considering the contribution and role of markets to the general performance of retail trading and high streets.

The first significant piece of research commissioned by NABMA was produced in 2004 and became known as the “Rhodes Report”, which provided a snapshot of the state of the retail markets industry. In particular, the Rhodes Report identified 46,000 retail market traders. Comparing this with a figure of 38,220 in 2009, over the five year period from 2004 to 2009, there appears to have been a decline of 17% in the number of market traders standing on traditional retail markets. These figures indicate the decline in retail markets was already moving at a significant rate in the five years from 2004 to 2009.

On 27 November 2008 the Communities & Local Government Committee announced the terms of reference of an Inquiry into traditional retail markets. The purpose of the Inquiry was to determine whether traditional markets are in decline and, if so, whether the implications are sufficiently important to warrant greater consideration by local authorities and government. The CLG Committee published the report of its Inquiry on 23 July 2009 and one of its key findings was to highlight:

“the evidence of prolonged decline (of retail markets) coinciding with the growth of supermarkets”.

In relation to local government, the report states:

“we do not underestimate the challenge facing local authorities seeking to sustain their markets in the current austere climate. From the evidence we have received, it seems to us there are two big challenges: finance and management.”

Following the publication of the CLG report the markets industry published “Markets 21” in 2009, which is described as the most comprehensive review of retail and wholesale markets for a generation. At the date of preparation of this note, “Markets 21” is freely available online.

“Markets 21” gave details of the makeup of all markets in the United Kingdom, indicating that there was a total of 2,105 markets including 1,124 traditional retail markets, 26 wholesale markets, 605 farmers markets and 350 country markets. These markets produced a total turnover of £7.612 billion and sustained around 100,000 people in employment.

“Markets 21” made it clear that:

“although the number of traditional markets has remained relatively constant over the last five years, this potentially masks significant decline in terms of the size of those markets”.

Research carried out by NABMA since 2009 and up to 2014, in terms of an annual survey of retail markets, suggests that around 30% of all markets are showing significant reductions in the numbers of traders attending the markets and the number of stalls that are being let. At the same time, only 1% of markets are indicating that they are reducing the range of market days.

The findings of NABMA’s annual surveys confirms the statement made in “Markets 21” which is recorded above.

The decline in the market industry is particularly highlighted by the decline in the number of market traders. Reference was made at the outset to the figure of 46,000 highlighted in the Rhodes Report. The latest figures from the National Market Traders Federation (NMTF) shows that their membership is declining at a significant rate year on year. Over the two years 2013 and 2104 they lost between 2,500/3,000 members and their membership stood in 2014 at approximately 26,000. In 2004 the NMTF membership was in excess of 35,000. While not all market traders are members of the NMTF the current strength of the NMTF membership is arguably a barometer of the health of the market industry.

“Markets 21” made it clear that many markets are failing to protect their future. The CLG Committee highlighted the issues of finance and management and it is clear, particularly with the cost cutting that many local authorities have faced in the last five years, that investment in many markets has been a low priority. This led “Markets 21” in 2009 to conclude that:

“unless significant change materialises quickly, it is not unreasonable to suggest that somewhere between 20-25% of current markets will close within the next decade”.

Against this, London and other City Centres are seeing the emergence of specialised food markets. These follow the model of Borough Market in London, although generally on a much smaller scale. These will trade a few days a week, and tend to sell specialised food products or hot food. At the time of writing, KERB are a leading operator in London of such venues.

1.2 Local authority markets

The majority of markets operated in the United Kingdom are operated by local authorities. In 2009, around 60% of retail markets were operated by local authorities.

The CLG report of 2009 urged all local authorities to review management arrangements and consider whether existing arrangements were sufficient to meet the needs of the local market. DCLG, with the support of NABMA, subsequently published guidance to all local authorities on different management arrangements to show what might be achieved by adopting a different model.

NABMA suggest that by 2014 many local authorities were facing significant challenges with regard to their markets service. Furthermore, a change in management arrangements seems to be gathering pace with private operators taking over a number of local authority markets and, in other places, shared management arrangements giving rise to public/private partnerships being implemented.

The vast majority of local authority markets are situated in town centres and occupy a prominent position which has some considerable historical significance. However, given the changing nature of town centres and the general problems facing town centres, some markets have found their traditional locations difficult to sustain.

A recent example is Wakefield in West Yorkshire where, around 2009, a brand new market hall and open market were opened in the centre of town. However, the performance of the market has been such that the Council has recently made an announcement that both the market hall and the open market are to close and will be relocated in different parts of the town. The Council could no longer sustain the losses being suffered by the markets. The market hall will be replaced by a much smaller building.

The decline in local authority markets has been greater than any other kind of market operation. This is not unexpected given the scale of local authority markets and the pressures that have been experienced by local authorities over the period 2009-2015.

1.3 Other markets

Between 2004 and 2014 there has been a very significant growth in farmers markets. In 2009, farmers markets represented around 29% of the total number of markets operating in the United Kingdom. Whilst it is unlikely that this figure has risen significantly between 2009 and 2015, there has been a rise in the number of markets operated by community and social enterprise groups.

In addition, between 2008 and 2014 there has been increases in the number of commercial car boot sales that have been held on green field and outside of town centres locations. Car boot sales can have an impact on traditional markets and may contribute to a decline of the town centre market.

The rise in the farmers markets and the other types of markets have led to a situation where, instead of markets being held on a daily basis throughout the week, there is a greater number of markets now being held on a periodic basis either weekly, monthly or at some other time. This, in turn, has led to a new generation of market traders. Whilst there has been a substantial fall in the number of regular market traders, which is arguably contributing to the decline of traditional retail markets, the markets industry is seeing the introduction of a number of market traders who are happy to trade on a casual basis or who are using market trading as a second form of income.

In reality this period may mark the beginning of a transition in the way that markets are operated and, whilst there may be a reduction in the number of markets, particularly local authority markets in the future, the assessment in “Markets 21” that around 20-25% of markets might face closure, may not transpire in the light of the “new” types of markets that are appearing in England and Wales.

These new markets are likely to have an ongoing impact on traditional retail markets and traditional retail markets will probably be compelled to continue adapting to the changing markets picture.

1.4 Rent Movements

There are more flexible lease patterns being agreed now than 7 years ago. Operators like to keep a “nucleus” of traders together, and may run a market at a reduced profit to ensure their traders have a market place to trade from every day of the week. However, there is evidence of competition for the running of outdoor markets, which means that rents paid are for whatever reason a good indicator of the value of the market place.

Rental evidence should continue to be analysed against an assessment of reasonable annual gross receipts at the AVD, to produce a comparator in the way of a percentage of gross receipts. However, it is clear that an eye needs to be kept on the expenditure side of the equation, especially when applying the percentages drawn from rented market places and applying it to others that do not have a commercial rent passing.

Rental evidence so far reveals rents paid that support a range of percentages when analysed against the Gross Receipts. Similarly, certain arrangements with market authorities base the rent to be paid on a specific percentage of gross receipts, further validating the approach.

2. Changes from the last practice note

2.1 Markets and Market Places in One Assessment

Settlement work during the 2010 lists almost universally confirmed an approach that supported the scheme adopted for markets and market halls. Where rents were available, the relationship to the gross receipts indicated that the markets scheme was underpinned and reached a broad degree of acceptance.

However, there have been some changes in the fortunes of markets that have resulted in a change in the percentages adopted for 2017 rating lists. The experience of settlement work during 2010 lists and the reports from operators’ representatives have resulted in a slight change to the ranges of percentages given below for open markets.

2.2 Stalls, Street Trading and Similar Pitches used for Sales and Promotions

The practice note provided for 2010 lists purposes concentrated solely on the market places in single assessments, and did not include the stalls explicitly. However, there is no change in approach to these classes between the two rating lists; it is anticipated that rental evidence will underpin a locally derived Scheme of Value. (See Paragraph 4.2 below).

3. Ratepayer Discussions

The National Association of British Market Authorities (NABMA) represent many local authority and private operators of markets in England and Wales. Discussions have been held with NABMA and its views considered prior to the making of this advice.

4. Valuation Scheme

4.1 Markets and Market Places in One Assessment

In principle a scheme based on a percentage of gross receipts is fairly robust, as RVs should generally fall if any particular market is weathering lower receipts leading up to AVD.

The preferred method of valuation is the rental approach; rents should be analysed and applied by reference to gross receipts (or payments in the nature of stallageetc) paid to the market operator by the stallholders.

Gross receipts (including rents or tolls in the nature of stallage) (£) Halls % Open %
Sub 50,000 (min if struggling) 10 - 15 15 - 22.5
50,001 – 100,000 15 - 20 20 - 25
100,001 – 250,000 20 - 22.5 22.5 - 30
250,001 – 500,000 22.5 - 25 25 - 30
500,000 and above 25 - 30 30 - 40

As a starting point, a percentage in the middle of the range should be adopted. However, there may be reasons to depart from the mid-way point.

Where making a decision on which end of the range of possible percentages to adopt, the following guidance should be considered. These seek to establish the possibility of lower or higher expenditure than might be ordinarily anticipated.

Factors that may indicate a lower expenditure than anticipated (resulting in a higher point in the relevant range being adopted) Modern low maintenance hall Stallholders provide own stalls, or trade from own vehicles Fewer trading days to produce a given level of receipts Little competition from other markets or cheap shops Town centre position or near e.g. busy main road junction or other focal point Covered market protects from weather, may produce higher rents, but costs are higher

Factors that may indicate a higher expenditure than anticipated (resulting in a lower point in the relevant range being adopted)

Old high maintenance hall, perhaps listed Stalls provided by operator – plus maintenance if permanent Erecting, dismantling and storing operator’s temporary stalls is very expensive and could justify 5% lower rates than above Trading over several days to produce a given level of income Position off the beaten track – (perhaps the result of town centre development)

Factors that have little impact and instead are ordinarily reflected

Uncovered market is at mercy of the weather Small market in a very small town or village

Although it is hoped that the scheme of valuation detailed above will produce a consistent basis that becomes generally accepted, should challenges in a particular locality result in tribunal hearings it is important to obtain full details of all actual rents passing, where available and comparable, together with sufficient gross receipts and background information to be able to adjust and analyse them effectively. The geographical area that encompasses the basket of relevant evidence is anticipated to spread over various billing authority and county boundaries, especially where the assessments of markets and market places under challenge are situated in towns and villages in rural counties.

It is anticipated that such rental comparable analysis, together with any comparable assessment evidence, should underpin the scheme of value above and therefore allow valuations to be made and defended in valuation tribunal on that basis.

4.2 Stalls, Street Trading and Similar Pitches used for Sales and Promotions

When making valuations for Stalls, Street Trading and Similar Pitches used for Sales and Promotions, it is anticipated that rental evidence will underpin a locally derived Scheme of Value.

It is expected that rents will be analysed on a price per m2 or price per stall. As such, it is appropriate for the assessment to be produced using the Valuation Support Application (VSA) within The Rating Support Application (RSA).

Practice note 1: 2010 - markets and market places (other than livestock)

1. Co-ordination

When dealing with markets and market places, particular care should be taken by to ensure that there is uniformity of approach. Close liaison with and between adjoining SRUs and Groups is recommended as appropriate. For further information regarding co-ordination, see Rating Manual: Section 6 Part 1 2010 . and the practice note at [Rating Manual: Section 6 Part 1 2010 PN[(https://www.gov.uk/guidance/rating-manual-section-6-chhallenges-to-the-rating-list/part-1-co-ordination).

1.1 Markets and Market Places

For Market Places that result from the right to hold a Market (however this arises), Special Category Code (SCat Code) 165 should be adopted. The relevant suffix letter will be S as markets are an SRU Class. Responsibility for ensuring effective co-ordination of SCat 165 assessments rests within the SRUs.

The Special Category Code (SCat), Primary Description Codes (P Desc Code) and primary descriptions available for markets and market places is as follows:

  • SCat Code: 165 – Markets (Other than Livestock)
  • P Desc Code: CM, using the default primary description of “Market Outdoor and Premises”, or
  • P Desc Code: CM1, using the default primary description of “Market Indoor and Premises”.

The default primary description should not be overwritten.

Valuations for markets and market places in one assessment are rental valuations using a percentage of Gross Receipts as comparator. As such they must be made using the Non-Bulk Server (NBS), which contains a specific application tailored for Markets and Market Places.

1.2 Stalls, Street Trading and Similar Pitches used for Sales and Promotions

Although not the focus of this note, individually assessed Market Stalls, street trading and similar pitches used for sales and promotions would use SCat Code 427, with the suffix letter of G, such assessments being a “Group” class.

The Special Category Code (SCat), Primary Description Code (P Desc Code) and primary description available for Market stalls, street traders and pitches used for sales and promotions are as follows: * SCat Code: 427 – Pitches for Stalls, Sales or Promotions * P Desc Code: CX, and the default description overwritten to: * (Site of)* (Market)* Stall / Pitch /Promotion* and Premises.

*Delete or overwrite as necessary.

Valuations of individual market stalls, street trading and similar pitches used for sales and promotions should be performed on the Rating Support Application (RSA), which contains a bespoke scale tailored for their use, and which should form the basis of any Valuation Scheme. This scale should not be used in respect of market places in one assessment, which should be valued using the Non-Bulk Server as mentioned in 1.1 above.

1.3 Other Information

Other sections of the Rating Manual may be of interest, these are:

Where there are two rateable occupiers in respect of the land on which the market is held, typically a car park with a market, responsibility for making the assessment in the relevant rating list remains with the SRU, even if the car park element has a higher rental value than the market operator. It is therefore vital that effective liaison occurs between SRUs and Group offices at all stages: list compilation, maintenance and when assessments are challenged.

2. Background

Although mentioning individually assessed stalls, pitches and promotions, the main focus of this practice note is markets and market places when considered in one assessment. When dealing with markets and market places, it is important to correctly identify the rateable occupier having paramount control of the particular market or market place concerned.

The main section should be considered at Rating Manual Section 6 part 3:630; additionally the Hereditament section of the Rating Manual also offers guidance at Rating Manual section 6 part 11.

3. State of Industry at the Antecedent Valuation Date (AVD) of 1 April 2008

The market operators themselves report a continuing slow decline in the overall fortunes of markets between 2003 and 2008, indicated by a decline in overall receipts in respect of certain market operators. Such operators also report experiencing hard times, some harder than others, and whilst receipts have remained static or reduced, expenditure side items have increased.

Despite this pessimistic overview, operators report that this is not a uniform pattern throughout the market sector. To illustrate this, they considered three broad groupings of markets that have been in existence for over 5 years and which have not been significantly changed during that time. Shown below is a summary of the perceived impact on each:

a. Large open Sunday markets – Still fairly strong performance, some improvement b. Covered markets – Still performing well c. Open markets – Struggling

Similarly, there are a number of rents being paid at high percentages of gross receipts, which are on the face of it suggest that higher percentages remain fully evidenced in certain circumstances. Certain individual markets are very successful indeed and remain so. It is therefore imperative that each market is considered carefully when making any assessment for rating purposes. The full facts must be established to ensure that valuations are properly considered and, if appropriate to use it, the scheme outlined below is applied correctly.

As far as open markets are concerned, small and ailing open markets are more susceptible to the general trend. Some are managed and run by councils to provide more of a service to the community than to make a profit; other councils allow private operators to run their markets, often paying a rent that is geared to a percentage of the gross receipts generated.

Although larger, covered and Sunday markets are faring better than smaller open markets, there may be unusual expenditure side items, such as extensive “bussing in” of customers and whilst there is apparently a trend away from “operator-provided” stalls, erection of stalls as a service to the stallholders by some operators is still evident.

It remains to be seen whether the current economic downturn proves actually to be of benefit to the outdoor market industry by driving shoppers to seek good value, a trend clearly manifest and exploited in the superstore and retail sectors.

4. Rental Evidence

There are shorter lease patterns being agreed now than 5 years ago. Operators like to keep a “nucleus” of traders together, and may run a market at a reduced profit to ensure their traders have a market place to trade from every day of the week. However, there is evidence of competition for the running of outdoor markets, which means that rents paid are for whatever reason a good indicator of the value of the market place. Rental evidence should be analysed against an assessment of reasonable annual gross receipts at the AVD, to produce a comparator in the way of a percentage of gross receipts. However, it is clear that a eye needs to be kept on the expenditure side of the equation, especially when applying the percentages drawn from rented market places and applying it to others that do not have a commercial rent passing.

Rental evidence so far reveals rents paid that support a range of percentages when analysed against the Gross Receipts. Similarly, certain arrangements with market authorities base the rent to be paid on a specific percentage of gross receipts, further validating the approach. Although the range of rents is limited, a Scheme of Valuation has been derived from it and is recommended below.

It is hoped that the scheme of valuation detailed above will produce a consistent basis that becomes generally accepted. However, under challenge, all rental evidence in the locality available at the time of challenge must be ascertained and analysed as a percentage of gross receipts. The geographical area that encompasses the basket of relevant evidence is anticipated to spread over various billing authority and county boundaries, especially where the assessments of markets and market places under challenge are situated in towns and villages in rural counties.

Requests for Information should be made on forms of return (FOR) as appropriate; FOR VO6028 has been specifically devised for use with markets and market operators, (for the avoidance of doubt the VO 6028 should not be used for individual stallholders, where the VO6003 is appropriate).

5. Valuation Guidance for Markets and Market Places in One Assessment

In principle a scheme based on a percentage of gross receipts is fairly robust, as RV’s should generally fall if any particular market is weathering lower receipts leading up to AVD. The preferred method of valuation is the rental approach analysed and applied by reference to gross rents (or payments in the nature of stallage etc) paid to the market operator by the stallholders.

Gross rents (or tolls in the nature of stallage) (£) Halls % Open %
Sub 50,000 (min if struggling) 10 - 15 15 - 25
50,001 – 100,000 15 - 20 20 - 30
100,001 – 250,000 20 - 22.5 25 - 35
250,001 – 500,000 22.5 - 25 25 - 35
500,000 and above 25 - 30 30 - 40
500,000 (Exceptional cases) 35 40

As a starting point, a percentage in the middle of the range should be adopted. However, there may be reasons to depart from the mid-way point.

Where making a decision on which end of the range of possible percentages to adopt, the following guidance should be considered. These seek to establish the possibility of lower or higher expenditure than might be ordinarily anticipated.

Factors that may indicate a lower expenditure than anticipated (resulting in a higher point in the relevant range being adopted)

  • Modern low maintenance hall
  • Stallholders provide own stalls, or trade from own vehicles
  • Fewer trading days to produce a given level of receipts
  • Little competition from other markets or cheap shops
  • Town centre position or near e.g. busy main road junction or other focal point
  • Covered market protects from weather, may produce higher rents, but costs are higher

Factors that may indicate a higher expenditure than anticipated (resulting in a lower point in the relevant range being adopted)

  • Old high maintenance hall, perhaps listed
  • Stalls provided by operator – plus maintenance if permanent
  • Erecting, dismantling and storing operator’s temporary stalls is very expensive and could justify 5% lower rates than above
  • Trading over several days to produce a given level of income
  • Position off the beaten track – (perhaps the result of town centre development)
Factors that have little impact and instead are ordinarily reflected
  • Uncovered market is at mercy of the weather
  • Small market in a very small town or village

Although it is hoped that the scheme of valuation detailed above will produce a consistent basis that becomes generally accepted, should challenges in a particular locality result in tribunal hearings it is important to obtain full details of all actual rents passing, where available and comparable, together with sufficient gross receipts and background information to be able to adjust and analyse them effectively.

It is anticipated that such rental comparable analysis, together with any comparable assessment evidence, should underpin the scheme of value above and therefore allow valuations to be made and defended in valuation tribunal on that basis.

This property is valued using the non-bulk server. The manual can be accessed here.

Practice note 1: 2005

1. Co-ordination

Particular care should be taken by to ensure that there is uniformity of approach. Close liaison with and between adjoining SRUs and Groups is recommended as appropriate. For further information regarding co-ordination, see [Rating Manual : section 6 part 1[(https://www.gov.uk/guidance/rating-manual-section-6-chhallenges-to-the-rating-list/part-1-co-ordination)

For Market Places that result from the right to hold a Market (however this arises), Special Category Code (SCat Code) 165 should be adopted. The relevant suffix letter will be S as markets are an SRU Class. Responsibility for ensuring effective co-ordination of SCat 165 assessments lies within the SRUs.

[Note: For individually assessed Market Stalls, Street Traders and Pitches used for Sales and Promotions, SCat Code 427 should be used, and the suffix letter will be G, as such assessments are a typically a Group class.]

A summary of the Special Category Codes (SCat) should be used as follows:

SCat 165: Markets (Other than Livestock) SCat 427: Pitches for Stalls, Sales or Promotions

2. Background

Care is needed in correctly identifying the rateable occupier having paramount control of the particular market or market place concerned

The main section should be considered at Rating Manual Section 6 part 3:630; additionally the Hereditament section of the Rating Manual offers guidance at Rating Manual section 6 part 11.

3. State of Industry at the Antecedent Valuation Date (AVD) of 1 April 2003

The general trend is slow decline in the fortunes of markets between 1998 and 2003, with the largest surviving best and the smallest hardest hit.

However, there are a number of rents being paid at high percentages of gross receipts, which are on the face of it supportive of the levels previously adopted and suggest that higher levels may be used more freely in certain circumstances.

Small and ailing markets are more susceptible to the general trend. Some are managed and run by councils to provide more of a service to the community than to make a profit; other councils allow private operators to run their markets, often paying a rent that is geared to a percentage of the gross receipts generated.

Although larger markets are suffering less than smaller ones, there may be unusual expenditure side items, such as extensive bussing-in of customers. Although there is apparently a trend away from operator-provided stalls, erection of stalls as a service to the stallholders by some operators is still evident.

To date there is little hard evidence. Current deals are not straightforward due to difficult trading conditions.

4. Rental Evidence

Rental evidence so far reveals rents paid that support a range of percentages when analysed against the Gross Receipts. Similarly, certain arrangements with market authorities base the rent on a specific percentage of gross receipts. The range of rents is limited, but a scheme of value is recommended below.

It is hoped that this scheme will prove to be acceptable and localised tones of value emerge. However, under challenge, all rental evidence in the locality available at the time of challenge must be ascertained and analysed as a percentage of gross receipts. The geographical area that encompasses the basket of relevant evidence is anticipated to spread over various billing authority and county boundaries, especially where the assessments of markets and market places under challenge are situated in towns and villages in rural counties.

Requests for Information should be made on forms of return (FOR) as appropriate; FOR VO6028 has been specifically devised for use with markets and market operators, but should not be used for individual stallholders, where the VO6003 is appropriate.

5. Valuation Guidance

In principle a scheme based on a percentage of gross receipts is fairly robust, as RV’s should generally fall if any particular market is weathering lower receipts.

The preferred method of valuation is the rental approach analysed and applied by reference to gross rents (or payments in the nature of stallage etc) paid to the market operator by the stallholders.

Gross rents (or tolls in the nature of stallage)(£) Halls % Open %
Sub 50,000 (min if struggling) 10-15 15-25
50,001 – 100,000 15-20 20-30
100,001 – 250,000 20-22.5 25-35
250,001 – 500,000 22.5-25 25-35
500,000 and above 25-30 30-40
500,000 (Exceptional cases) 35 40

As a starting point, a percentage in the middle of the range should be adopted. However, there may be reasons to depart from the mid-way point.

Where making a decision on which end of the range of possible percentages to adopt, the following guidance should be considered. These seek to establish the possibility of lower or higher expenditure than might be ordinarily anticipated.

Factors that may indicate a lower expenditure than anticipated (resulting in a higher point in the relevant range being adopted)

  • Modern low maintenance hall
  • Stallholders provide own stalls, or trade from own vehicles
  • Fewer trading days to produce a given level of receipts
  • Little competition from other markets or cheap shops
  • Town centre position or near e.g. busy main road junction or other focal point
  • Covered market protects from weather, may produce higher rents, but costs are higher

Factors that may indicate a higher expenditure than anticipated (resulting in a lower point in the relevant range being adopted)

  • Old high maintenance hall, perhaps listed
  • Stalls provided by operator – plus maintenance if permanent
  • Erecting, dismantling and storing operator’s temporary stalls is very expensive and could justify 5% lower rates than above
  • Trading over several days to produce a given level of income
  • Position off the beaten track – (perhaps the result of town centre development)

Factors that have little impact and instead are ordinarily reflected

  • Uncovered market is at mercy of the weather
  • Small market in a very small town or village

It is hoped that the scheme of valuation detailed above will produce a consistent basis that becomes generally accepted. However, should challenges in a particular locality result in tribunal hearings, it is important to obtain full details of all actual rents passing, where available and comparable, together with sufficient gross receipts and background information to be able to adjust and analyse them effectively.

It is anticipated that such rental comparable analysis, together with any comparable assessment evidence, should underpin the scheme of value above and therefore allow valuations to be made and defended in tribunal on that basis.