Taking on commercial premises is one of the biggest financial commitments you will make as a new business. Get it right and you have a base to grow from. Get it wrong and you could be locked into an expensive lease that drains your cash flow.

Allow 3-6 months from starting your search to moving in. This gives time for viewings, negotiations, solicitor work, and any fit-out you need.

How to search for commercial property

How to search for commercial property covering agents, online portals, council registers, enterprise zones, and key considerations.

Finding the right commercial property takes time. Start searching early — allow 3-6 months from first search to moving in, to account for viewings, negotiations, legal work, and any fit-out needed.

Commercial property agents: Specialist agents (Savills, Knight Frank, local firms) handle most commercial lettings. Register with agents covering your target area. They can also advise on market rents and negotiate on your behalf.
Online portals: Rightmove Commercial, Zoopla Commercial, and EG Propertylink list available commercial properties. Filter by location, size, use class, and rent to create a shortlist.
Council empty property registers: Local councils maintain registers of empty commercial properties. Some offer reduced business rates or grants to encourage occupation.
Enterprise zones: Government-designated enterprise zones offer incentives including simplified planning, business rate discounts (up to £275,000 over 5 years), and superfast broadband. Check gov.uk/enterprise-zones.
Use class (planning): Check the property's planning use class matches your business activity. Class E covers shops, restaurants, offices, light industrial, gyms, and creches. Changing use class may require planning permission.
Business rates: You will pay business rates on commercial property. Small businesses may qualify for Small Business Rate Relief (up to 100% relief on properties with rateable value under £12,000 in England).
Access and location: Consider customer access, delivery access, parking, public transport links, proximity to suppliers or target market, and visibility/footfall for retail businesses.

Business rates

Find an enterprise zone

Lease or licence?

Before viewing properties, understand the two main ways to occupy commercial space. Your choice affects your legal rights, flexibility, and costs.

Lease vs licence to occupy

Comparison of commercial lease vs licence to occupy covering security of tenure, exclusivity, LTA 1954 protection, and flexibility.

When taking commercial premises, you will typically sign either a lease or a licence to occupy. They offer very different levels of protection and flexibility.

Lease - definition: Grants exclusive possession of defined premises for a fixed term. Creates a legal estate in land. Must be in writing if for more than 3 years.
Licence - definition: Grants permission to use premises without exclusive possession. Personal to the licensee. More like a permission slip than a property right.
Security of tenure (LTA 1954): Leases are protected by the Landlord and Tenant Act 1954 (unless contracted out). This gives you the right to renew at the end of the term. Licences have NO security of tenure — the landlord can end them with reasonable notice.
Exclusivity: Leases grant exclusive possession — the landlord cannot enter without permission (except for emergencies or as specified in the lease). Licences often allow the landlord to move you or share the space.
Flexibility: Licences are more flexible — shorter commitment (monthly or quarterly), easier to end, less legal cost to set up. Leases involve longer commitments (typically 3-25 years) and higher legal costs.
When to choose a licence: Good for short-term or flexible needs — co-working spaces, pop-up shops, market stalls, serviced offices. Lower upfront cost and commitment.
When to choose a lease: Better for established businesses needing stability — you control the space, can fit it out to your needs, and have renewal rights. Essential if investing significantly in the premises.
Cost to set up: Licence - minimal legal costs (£200-500). Lease - solicitor costs typically £1,000-3,000+ depending on complexity.

What to check before signing

Before committing to any commercial property:

Use class: Confirm the property's planning use class matches your business activity. Class E covers most commercial uses (shops, offices, restaurants, light industrial) but not all. Changing use class requires planning permission.
Condition survey: For FRI leases, get a chartered surveyor to prepare a Schedule of Condition before signing. This records the property's existing state and limits your repair liability to that level.
Service charges: In multi-let buildings, check the service charge history and budget. Unexpected service charge increases can significantly affect your costs.
Business rates: Check the rateable value and whether you qualify for Small Business Rate Relief. Ask the landlord or local council for the current rates bill.
Break clauses: Negotiate a break clause allowing you to exit the lease early (typically at year 3 or 5 of a longer lease). This gives you flexibility if the business does not grow as expected.
Rent-free period: Most landlords offer 1-3 months rent-free for fit-out. Negotiate this before signing — it is much harder afterwards.

Commercial lease types comparison

Comparison of FRI, IRI, and EFRI commercial lease structures showing repair responsibilities and risk allocation.

UK commercial leases typically follow one of three structures determining repair and insurance responsibilities:

Full Repairing and Insuring (FRI) Lease

Tenant responsibility: All repairs (internal, external, structural, roof) and insurance reimbursement.

Typical for: Single-let properties, standalone units, long leases (10-25 years).

Critical protection: Schedule of Condition is ESSENTIAL to limit liability to pre-existing defects.

Internal Repairing and Insuring (IRI) Lease

Tenant responsibility: Internal repairs only (flooring, plaster, decorations, fittings).

Landlord responsibility: Structure, exterior, roof, common areas (costs recovered via service charge).

Typical for: Multi-let premises (offices, shopping centres), shorter leases (3-10 years).

Effective Full Repairing and Insuring (EFRI) Lease

Landlord organises and pays: All building works, maintenance, and insurance.

Tenant pays: 100% of actual costs via service charge and insurance rent.

Typical for: Modern office buildings, business parks, retail parks (3-15 years).

FRI - Tenant risk level: Highest (liable for structural defects)
IRI - Tenant risk level: Lower (predictable service charge)
EFRI - Tenant risk level: Medium (pays actual costs, no control)
FRI - Landlord control: Lowest
IRI - Landlord control: Highest
EFRI - Landlord control: Highest

Alternatives to a traditional lease

If you are not ready for a commercial lease, consider these lower-commitment options:

Serviced offices: All-inclusive monthly fee covering desk space, meeting rooms, reception, and utilities. Flexible terms (often monthly). Higher per-desk cost but zero upfront investment.
Co-working spaces: Shared workspace with hot desks or dedicated desks. Good for networking and keeping costs low in the early stages.
Pop-up shops: Short-term retail lets (days to months) for testing physical retail before committing to a lease.
Home working: No premises costs, but check your mortgage/tenancy agreement permits business use and inform your home insurer. You may need to pay business rates on the portion used exclusively for business.

Define your requirements

List your must-haves (size, location, access, use class) and nice-to-haves before searching. This prevents wasting time on unsuitable properties.
Budget for total occupancy costs

Rent is only part of the cost. Add business rates, service charges, insurance, utilities, and any fit-out costs to get your true monthly premises cost.
Get a condition survey for FRI leases

Before signing any Full Repairing and Insuring lease, pay a chartered surveyor to prepare a Schedule of Condition. This could save you thousands at lease end.
Negotiate a break clause

Insist on a break clause allowing you to exit the lease early. A 10-year lease with no break clause is a significant risk for a new business.
Instruct a commercial property solicitor

Do not sign a commercial lease without legal advice. A solicitor will review terms, negotiate amendments, and ensure you understand your obligations. Budget £1,000-3,000 for solicitor fees.

Business rates

Business premises and rates

Business Context Testing

Content Graph

Guvnor

Rent your first business premises

Lease or licence?

What to check before signing

Alternatives to a traditional lease

Define your requirements

Budget for total occupancy costs

Get a condition survey for FRI leases

Negotiate a break clause

Instruct a commercial property solicitor

Compliance Assistant

🧪 Business Context Testing

◉ Content Graph

Lease or licence?

What to check before signing

Alternatives to a traditional lease

Define your requirements

Budget for total occupancy costs

Get a condition survey for FRI leases

Negotiate a break clause

Instruct a commercial property solicitor

Related guides in Premises & Operations

Understanding commercial lease obligations

Pubs Code for tied tenants

Renting business premises

Passenger lift compliance for building owners

Lighting requirements for business premises

Business Context Testing

Content Graph