Zones, funds and the Littlewoods campus: what Budget 2026 means for businesses buying premises in the Liverpool City Region

If you run a business in Liverpool and are thinking about buying your premises, Budget 2026 contains a lot of talk about zones. Some of it applies to the city region and some of it does not. This article separates the two, explains what each measure actually does, and sets out how a lender will see a purchase in an area that is attracting public money.

Investment Zones: what the Budget does and does not say

Investment Zones get two mentions in Budget 2026, and neither is on Merseyside.

• West Midlands. The West Midlands Investment Zone is described as "supporting advanced manufacturing through sites like Green Power Park in Coventry" (Budget 2026, Box 4.D).
• Northern Ireland. The Enhanced Investment Zone has moved into delivery and "is expected to support around 1,000 jobs and attract around £230 million of private investment" (Budget 2026, para 4.158).

The document does not mention any Investment Zone in the Liverpool City Region, and it does not mention Freeports at all. That does not mean existing arrangements have ended. It means the Budget makes no change you can plan around. If you are buying a site because of Investment Zone or Freeport tax incentives, confirm the current terms with your accountant and the relevant authority directly rather than relying on Budget coverage.

The zone that does apply: Business Rates Retention

The measure that names the Liverpool City Region is different. The government intends to take forward a first wave of Mayoral Strategic Authority Business Rates Retention Zones in areas including the Liverpool City Region, "subject to Full Business Case approval and legislation" (Budget 2026, para 4.61). The document says these zones will support commercial development and "enable more tax to be spent where it is raised".

Within these zones, "billing authorities can retain 100% of business rates growth above an agreed baseline for 25 years" (Budget 2026, para 6.43).

It is worth being clear about what this is and is not.

• It is not a rates cut for occupiers. A retention zone changes where the money goes, not what a ratepayer pays. Your bill is still set by your rateable value and the reliefs you qualify for.
• It is a funding mechanism. Because local government keeps the growth in rates income from new and improved buildings, it can borrow against or reinvest that growth in infrastructure and site preparation. Over time that can improve the setting your premises sit in.
• It is not yet in force. It still needs a business case and legislation, and the Budget does not set a start date for the Liverpool City Region zone.

Alongside the zones, Mayors will receive "a 20% share of locally retained business rates from next year", with local and regional government retaining 100% of business rates income by the end of the decade (Budget 2026, para 4.60).

Money flowing into the city region

Several other commitments bear on Liverpool specifically.

Littlewoods. £20m from the Growth Mission Fund "will support the restoration and redevelopment of the long-derelict Littlewoods site in Liverpool into a 260,000 square foot creative campus for film, TV, gaming, immersive technology and digital screen industries, subject to final business case" (Budget 2026, para 6.56). For creative, production and digital businesses looking at premises around Edge Lane and the wider east of the city centre, this is a meaningful signal about the direction of the area.

City Investment Funds. The Liverpool City Region is one of seven areas receiving grant, loan and patient capital funding "to deliver city densification at a local level" (Budget 2026, para 6.45). The Budget does not list sites or amounts for Liverpool.

Good Growth Funds and mayoral borrowing. £285m of seed funding is set aside for 2027-28, including £165m to support places with a mayor (Budget 2026, para 4.64). A bespoke £1.5bn borrowing facility for Mayoral Strategic Authorities is due to be operational by April 2028 and is intended to include mechanisms for concessional lending to locally determined projects (Budget 2026, para 4.65).

Carbon capture. The government says it is prioritising delivery of mature carbon capture and hydrogen projects at the Teesside, Merseyside and North Wales clusters (Budget 2026, para 4.36). For industrial occupiers around the Mersey, that is continuity rather than new money.

Northern 500. A programme for mid-sized Northern businesses, working with private partners including NatWest and Sage, is intended to help ambitious companies scale (Budget 2026, para 4.91). It is a support programme, not a lending scheme.

How this changes the case for buying

For an owner-occupier, the question is whether to keep renting or to buy, and if buying, where. The Budget measures affect the answer in three ways.

Location. Public money into a district can support occupier demand and values over the long run. The Littlewoods campus and any City Investment Fund projects are the most location-specific signals in the document. But commitments "subject to final business case" are not guaranteed to proceed, and timings are not set.

Valuation. Lenders value on today's evidence. A RICS valuer will look at comparable sales and lettings in the immediate area, not at a regeneration plan. A business buying near a planned scheme should expect a valuation that reflects the area as it is now.

Affordability. Owner-occupier lending is sized on the business's ability to service the debt from its profits. The Budget's wider measures feed into that. The National Living Wage rises 3.9% to £13.21 an hour from 1 April 2027 (Budget 2026, para 6.128), and the Office for Budget Responsibility expects inflation to peak at 3.8% in the first quarter of 2027 before returning to 2% by the third quarter of 2028 (Budget 2026, para 1.37). For Liverpool's hospitality businesses, the retail, hospitality and leisure business rates package from April 2027 works the other way, with higher Small Business Rates Relief thresholds and a two-year real-terms freeze for qualifying properties in England (Budget 2026, paras 6.190 to 6.191).

Hotel and serviced accommodation owners should also note that the government plans to legislate so that all Strategic Authorities can introduce an Overnight Visitor Levy (Budget 2026, para 4.60). No rate or start date is given for Liverpool.

Illustrative example: a Merseyside digital production company renting space near the city centre is considering buying a small freehold building. A lender will look at its last two to three years of filed accounts, the building's current value as evidenced by local comparables, and the deposit available. Proximity to the Littlewoods scheme may make the building easier to re-let or sell in future, but it will not increase the loan on day one.

What to do now

1. Separate tax incentives from property fundamentals. If a site's appeal rests on Investment Zone or Freeport incentives, get written confirmation of the current terms. The Budget does not restate them.
2. Do not expect a rates cut from a retention zone. Check your own rateable value and any relief you qualify for, especially if you are a retail, hospitality or leisure occupier.
3. Model wage and energy costs into your cover. The April 2027 National Living Wage rise and the inflation peak in early 2027 will feed into the profit figures a lender uses.
4. Prepare your accounts pack. Filed accounts, current management figures and a short note on how ownership supports the business are what lenders read first.
5. Treat regeneration as upside, not security. Buy a building that works for your business today, in a location you would be comfortable owning without the promised scheme.

Key dates

• 28 October 2026: Budget 2026 published.
• 1 April 2027: National Living Wage rises to £13.21; retail, hospitality and leisure rates measures take effect in England; Mayors' 20% share of business rates begins.
• 2027-28: £285m Good Growth Fund seed funding.
• April 2028: £1.5bn Mayoral Strategic Authority borrowing facility due to be operational.
• To be confirmed: start date of the Liverpool City Region Business Rates Retention Zone, subject to business case and legislation.

Brought to you by Business Mortgages Broker

This article was prepared by Business Mortgages Broker, which arranges owner-occupier business mortgages for UK trading companies. Founder Matt Lenzie has 25 years in financial services, raising debt and equity, and has arranged around £400m of property finance. If you are weighing up buying premises on Merseyside, read more about business mortgages in Liverpool and what lenders will ask to see.

Source: HM Treasury, Budget 2026 (HC 726), 28 October 2026. This article is general information, not tax or financial advice. Commercial Mortgages Liverpool is not authorised by the Financial Conduct Authority and does not give regulated advice or personal recommendations.