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In the Queen’s Speech on 10 May 2022, the Government set out plans to regenerate town centres and high streets with the Levelling Up and Regeneration Bill, which will give local authorities the power to hold compulsory rental auctions on shops and other premises. It will allow small businesses and community groups to take over shuttered properties which have stood empty for more than twelve months. We asked Head of Commercial Sector, Duncan Bedhall, his thoughts on the proposals.

Empty shops are often a blight for any high street – unattractive and detrimental to the perception of the high street and I think we can all agree that there are too many empty shops. I am sure the Government’s intentions are good when they propose to force owners to let their shops to the highest bidder. However, we need to consider the implications of this headline-catching proposal.

The first principle is that of government interfering with private company’s and individual’s property rights. This should not be done lightly in a property-owning democracy. It is accepted that real estate is appropriated by the state for the benefit of schemes for the public good, but wholesale compulsion to let to whoever is interested in taking space is whole different ball game.

Secondly, property development is complicated and time consuming. Redundant space can be empty for years whilst challenging urban developments are being conceived. Landlords must wait for Planning Consent, leases to expire and indeed a market to recover before ambitious schemes can be started.

Thirdly, what control will a landlord have over the quality of their occupier? In the interest of good estate management, tenant quality and mix are important. Being forced to let to an inappropriate user could lead to more vacancies in a shopping centre or high street, therefore compounding the problem. The old adage of “better an empty house than a bad tenant” still holds true!

What is clear to me is there are too many physical shops in the UK. The move to online shopping has created a slump in demand for conventional space after decades of expansion. This will not change, so the nature of town centres must.

We have a chronic shortage of housing, exacerbated by a lack of development land in a densely populated island. In my opinion, redundant retail property gives an ideal opportunity to provide more housing. If we can get more people and in particular, young people to live in city centres they will support the remaining retail space and create thriving dynamic environments, whilst helping solve a seemingly intractable problem.

If the high street must change and much retail floorspace is obsolete, perhaps better policies and incentives to support conversion or redevelopment would be preferable, to then allow the market to do its magic.

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*In 2021, 7,160 shops opened across Great Britain, compared with 17,219 closures, a net decline of 10,059. This was compared with a net decline of 9,877 the year before. A total of 2,870 UK stores closed in the six months to 30 June 2019.

*data source research undertaken by accountancy firm PwC and compiled by the Local Data Company

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