According to articles published in The Mail and The Times this week, commercial landlords could be ‘forced’ to rent out vacant shops which have been empty for longer than six months under new government plans aimed at revitalising struggling high streets.
Whilst there’s no doubt that the COVID-19 pandemic and associated lockdowns had a significant impact on high streets and town centres across the UK, the challenge to fill vacant retail units has been apparent for a number of years. Increasing online sales and a growing focus on the ‘experience economy’ have meant that many high street businesses are reducing their presence in town centres or closing altogether.
Data from retail analyst Springboard suggests that more UK high street stores are now shuttered than at any time in the past six years. According to latest figures from the British Retail Consortium, around one in seven retail units (16%) are currently said to be sitting empty. The north-east of England has the highest vacancy rate, with one in five shops closed.
The new powers will be introduced as part of the Levelling Up and Regeneration Bill, which will be announced in the Queen’s Speech next month and the goal is to breathe new life into town centres by reducing the number of boarded-up shops, whilst at the same time creating new opportunities for local small businesses and community groups and helping increase footfall and spending in town centres.
The hope is that the introduction of ‘Compulsory Rental Auctions’ will reduce the number of boarded-up shops, helping to increase footfall and spending in town centres. After a short grace period for landlords to find a commercial occupier to fill the shop – expected to be around 6 months – local authorities will be able to instigate an auction, inviting bids from interested parties including community groups, charities, and small, local businesses, stimulating innovation and accelerating economic growth and recovery.
Similar initiatives to regenerate empty high streets have been floated in the North West, including Liverpool’s “Shops for a Pound” scheme which was first announced back in 2015. The scheme proposed that local residents submit ideas and business proposals aimed at bringing 12 empty shops in the Picton area back into use. Successful applicants would be able to rent the units for £1 a week for up to three years, although they would be responsible for renovating the units themselves. However, the initiative never got off the ground and many of the units remain empty.
Access to affordable real estate in the right area is critical to the success of a new business. With margins being squeezed by rising utilities, product and distribution costs, many established businesses are feeling the pinch. Finding a good location at the right price is certainly a step in the right direction for any new business, however the Government needs to take steps to ensure that the focus of this initiative remains on helping those businesses who need it most. Allow Starbucks the same opportunity as an independent coffee shop and we could soon see a return to high streets once again dominated by global brands with little room for locals.
Further details on the proposals are expected to be announced as part of the Government’s Levelling Up agenda during The Queen’s Speech on May 10th.