by Sam Akbay
Auctions Could Revive Vacant Commercial Properties
As of December 2, 2024, a groundbreaking initiative will empower local authorities across England to tackle the persistent problem of empty high street shops. This new regulation allows councils to auction off leases of commercial properties that have remained vacant for prolonged periods. The UK Government believes this scheme, introduced under the Levelling Up and Regeneration Act 2023, will revitalize town centres, stimulate local economies, and create opportunities for communities.
The Impact of High Street Rental Auctions
The High Street Rental Auctions (HSRA) powers aim to reduce the negative impact of long-term vacancies on high streets. Shops that remain empty for more than 365 days within a 24-month period could now see councils stepping in to lease these properties for terms ranging from one to five years. However, the process encourages councils to engage with landlords first, prioritizing collaboration before intervention.
Local Growth Minister Alex Norris is set to elaborate on these powers in a speech on November 21, 2024. He will also introduce Early Adopters—local authorities leading the charge with HSRAs. These councils will share best practices and work closely with the Ministry of Housing, Communities, and Local Government to provide a strategic framework for the successful implementation of the scheme.
Why HSRAs Matter
Vacant commercial properties pose significant challenges to local economies and communities. They can become hotbeds for anti-social behaviour, decrease foot traffic, and deter investment in surrounding businesses. By unlocking the potential of these spaces, HSRAs can transform high streets into vibrant hubs of activity, driving footfall and supporting business growth.
Moreover, the initiative emphasizes the importance of involving qualified agents in the process. Propertymark, a leading professional body in the property sector, supports this move, stressing that effective implementation of HSRAs can positively impact the economic and social fabric of towns and cities.
Addressing Practical Concerns
While the initiative has been broadly welcomed, there are key questions about how it will work in practice:
- Area Selection: Which towns and cities will benefit the most from these powers?
- Funding: How will councils finance the implementation of auctions?
- Reserve Pricing: How will auction reserve prices protect market values and ensure mortgages are covered?
To address these concerns, Propertymark has recommended that councils consult with commercial property experts and tailor the approach to suit their specific needs. Ensuring auctions are managed by experienced professionals will safeguard market integrity and maximize the scheme’s effectiveness.
A Regeneration Blueprint
The activation of HSRA powers is a significant step toward addressing the issue of long-term high street vacancies. Auctions represent a practical solution that not only prevents landlords from sitting on underutilized assets but also reimagines these spaces as contributors to local communities and economies.
As we await further details and the rollout by Early Adopters, it’s clear that the success of this initiative hinges on collaboration—between councils, landlords, and property experts. Done right, it could set a blueprint for how towns and cities across the UK can regenerate their high streets, breathing new life into their urban centres and supporting a more dynamic future for local economies.
