A bustling high street is perceived to be a good thing: somewhere to find not merely all the ingredients of Ratty’s picnic in The Wind in the Willows (“coldtonguecoldhamcoldbeefpickledgherkinssalad frenchrolls…”), but also face cream, sandpaper, a bunch of flowers, some stamps, and that new book – all in one place. Somewhere to meet friends, have a cup of skinny decaf latte and browse the paper.
But that feel-good shopping and entertainment model has been in retreat for years. Review after review has identified various causes for this: the awesome drawing power of out-of-town superstores and shopping centres; the internet; Covid-19; too much traffic; too little traffic.
Solutions have been proposed, but the vacancy rate for shops and other high street staples is stuck firmly at 14% (albeit no longer thought to be increasing), with some areas of the country very much worse than others. And, of course, the problem is circular: if the high street is moribund, you are still less likely to patronise it, and so still worse it gets.
Under the hammer
The revitalisation of this country’s high streets has been a priority for each government for a very long time. A consultation by the last government in 2023 concluded that landlords of vacant premises were at least part of the problem, and needed a prod, failing which local authorities should be able to conduct high street rental auctions. This, it was thought, would prompt property owners into letting their vacant premises, failing which local government would do it for them.
This proposal was brought forward with the Levelling-Up and Regeneration Act 2023, which received royal assent on 26 October 2023, but with no steps taken to bring the HSRA provisions in Part 10 into force. That changed this month, with the promulgation on 7 November 2024 of The Local Authorities (Rental Auctions) (England) and Town and Country Planning (General Permitted Development) (Amendment) Regulations 2024, which are to be brought into force on 2 December 2024.
These Regulations set out the process to be followed when a local authority in England exercises the powers given to it in Part 10 of the 2023 Act to arrange for a rental auction to be carried out in respect of qualifying high-street premises. They also provide for temporary planning permission for a change of use of such premises to a suitable high-street use for the duration of a tenancy granted following the rental auction.
The accompanying government press release on 12 November 2024 made ambitious claims for the use of these sweeping new powers (which RICS had earlier described as a “blunt tool”): they would “breathe new life back into high streets and transform long-term empty shops”, allowing “local leaders to tackle persistently vacant properties in city, town and village centres”, stopping “disengaged landlords from sitting on empty properties for more than 365 days in a 24-month period”, by giving councils rights to “step in and auction a one-to-five-year lease”.
This breathless prose conceals much that is questionable, even for those who retain any optimism that local government will be able to do that which the market has failed to do. Much as the local growth minister might opine that “high streets are the beating heart of our communities”, it is difficult to see how the planned changes will bring in the punters in the way claimed.
Any other bids?
This is how it is meant to work. Before putting a property to a rental auction, a local authority must first seek to resolve the vacancy by engaging with the landlord. If that does not bear fruit, then the local authority must instruct a qualified person to enter and survey the property with a view to preparing a schedule of works required to raise the premises to a specified minimum standard (RICS take note).
The authority has then to notify the property owner of the tenancy it intends to grant at auction, following appropriate notification and marketing. Having considered whatever rental bids materialise from this process, the authority “may choose to accept a bid”, if the landlord does not, in which case section 204 of the 2023 Act has the effect that the authority can do so as if it were the landlord.
The Regulations accompany this with a wealth of detail concerning designation, surveys, notices (lots of them), time-limits and decision-making. The government’s hope is that the threat of all this will compel owners of vacant properties to become proactive instead of sitting on their hands, as they are alleged (perhaps improbably) to be doing.
We can expect challenges to many aspects of this complex new process as the Regulations start to bite, with some owners disputing that their part of town should have been designated, and others objecting that theirs was not. And we are all familiar with the challenges that can arise when such a heavily notice-dependent regime is introduced.
We also wonder how under-resourced authorities will find the manpower to deal with this new unprecedented role, particularly once the avoidance industry swings into gear. Local authorities currently have a surprisingly wide array of powers aimed at bringing empty residential property back into use, but these HSRA powers will engage an entirely different skillset.
Will any of this work? It will be interesting to see. Revealingly, though, the explanatory note to the Regulations states: “A full impact assessment has not been produced for this instrument, as no, or no significant, impact on the private, voluntary or public sector is foreseen.” Just window dressing, then.
Guy Fetherstonhaugh KC, Toby Boncey and Joe Ollech are barristers in Falcon Chambers
Photo © Maureen McLean/Shutterstock
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