What a London Office Actually Costs in 2026: The All-In Numbers Nobody Publishes

By Morgan Pryce — Market Intelligence

The headline rent is typically only 55–65% of the true cost of occupying a London office. A realistic all-in budget must add business rates (reset by the 2026 revaluation, with swings from +38% in Farringdon to -11% at London Bridge), service charge, utilities, fit-out amortisation and dilapidations. In 2026, prime headline rents are heading towards ~£93 per sq ft in the City core and ~£200 per sq ft in the West End core.

The most misleading number in property

Ask what an office costs and you will be given the headline rent per square foot. It is the number on every marketing brochure — and it is rarely more than two-thirds of the truth. At Morgan Pryce we advise occupiers on the total cost of occupation, because that is the number that actually hits the P&L. This briefing sets out the full cost stack for 2026, including the item catching many businesses off guard this year: the business rates revaluation.

The 2026 Cost Stack

1. Headline rent: Prime rents grew 9.1% in the City core and 18.8% in the West End core during 2025. Forecasts point to roughly £93 per sq ft in the City core and £200 per sq ft in the West End core by end-2026, with above-inflation growth expected across prime UK markets. Secondary space tells the opposite story — flat or softening rents, longer voids and deeper incentives — which is precisely why the headline number alone tells you so little.

2. Business rates — the 2026 reset: The 2026 revaluation has redrawn London’s cost map, and the changes are anything but uniform:

Farringdon’s rise reflects the Elizabeth Line’s transformation of the district; London Bridge’s fall is a market recalibration rather than declining desirability. For a mid-sized occupier, the difference between a +38% and a −11% submarket can amount to a five-figure annual swing — before a single negotiation.

3. Service Charge: Typically £8–£15+ per sq ft in multi-let Central London buildings, higher in amenity-rich towers. Rarely capped unless you negotiate a cap.

4. Fit-out: Build costs are forecast to keep rising through 2026 and 2027. Amortised over the lease term, fit-out commonly adds a five-to-low-six-figure annual line for SME occupiers — which is why plug-and-play and CAT A+ suites, despite commanding rent premiums of 12–20%, can produce a lower total cost for smaller requirements once capex is stripped out.

5. Dilapidations: The exit cost most occupiers forget to budget until it arrives. Negotiable at lease drafting; expensive at lease end.

6. The hidden line – the wrong office: Under-utilised space is pure cost. Occupiers are now taking 15–30% less space than pre-pandemic but paying more per square foot for buildings that genuinely support how their people work — the clearest evidence that value per square foot, not price per square foot, is the metric that matters.

Worked illustration: a 40-person business, 5,000 sq ft

Take a well-specified Grade A floor at an illustrative £80 per sq ft headline rent:

• Rent: £400,000
• Business rates: ~£180,000–£220,000 depending on submarket and 2026 movement
• Service charge (£12 psf): £60,000
• Utilities and insurance: ~£25,000
• Fit-out amortised (5-year term): ~£80,000–£120,000
• Realistic all-in: circa £745,000–£825,000 per year — roughly
  £18,500–£20,500 per employee

The headline rent was £400,000. The real number is more or less double. Every relocation and renewal decision should be made on the second figure, not the first.

What Smart Occupiers Are Doing

Three patterns stand out from our current negotiations:

1. Running the rates map before the search: A strategic postcode shift — Shoreditch to Aldgate, for instance — can preserve the culture fit while materially cutting the rates line.
2. Pricing plug-and-play honestly: For sub-5,000 sq ft requirements, fitted suites frequently beat conventional leases on total cost despite the higher headline rent.
3. Negotiating the whole stack: Rent-free periods, capped service charges, landlord fit-out contributions and pre-agreed dilapidations are all negotiable — but only for occupiers who arrive with alternatives and time.

Morgan Pryce acts exclusively for occupiers, never landlords. If you would like the all-in cost model run against your own requirement or your current lease, we will build it with you.

Sources & Trend Proof

1. Kontor, The 2026 Revaluation: What Smart Occupiers Need to Know — submarket rateable value movements including Farringdon +38%, Shoreditch +16%, Bloomsbury −5%, London Bridge −11%, Canary Wharf flat.
2. CBRE, UK Real Estate Market Outlook 2026 — Offices — prime rent forecasts of ~£93 psf (City core) and ~£200 psf (West End core) by end-2026; 2025 prime rental growth of 9.1% and 18.8% respectively.
3. Interaction, Office Market Outlook 2026 — plug-and-play/CAT A+ rent premiums of 12–20%; occupiers leasing 15–30% less space at higher per-sq-ft cost.
4. K2 Space / BCIS, London Office Market Review 2026 — build cost indices forecasting continued increases through 2026–2027; refurbishment-led supply now over half of pipeline.

Illustrative figures are indicative market ranges, not quotations; every requirement is priced individually.