The UK Government’s High Street Rental Auctions (HSRAs) initiative, a central component of the Levelling Up and Regeneration Act 2023, is set to reshape Britain’s high streets.
Starting 2 December 2024, local authorities will gain the power to auction leases for properties that have been vacant for over a year within the past two years.
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This move targets a pressing issue: the high street vacancy rate stands at 17.6%, with shopping centres not far behind at 14% in Q3 2024.
Local Growth Minister Alex Norris emphasised, “High streets are the beating heart of our communities. For too long, too many have been neglected, with more and more empty lots and boarded-up shopfronts.”
Under the scheme, councils can bypass unresponsive landlords, leasing properties to businesses or community groups for one to five years. A streamlined 11-week process includes a six-week marketing period to find tenants.
This mechanism is complemented by temporary Permitted Development rights, which simplify change-of-use approvals for properties, allowing for innovative new purposes.
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By GlobalDataChallenges in implementation
While the scheme holds promise, industry experts have voiced concerns about its practical execution. Ian Anderson, Senior Director at Lichfields, warned, “This is a bold and untested approach. While it gives local authorities new powers, we question whether they have the resources to implement such an ambitious scheme effectively.”
Resource constraints could hinder councils’ ability to run auctions efficiently, while potential conflicts between landlords and local authorities may arise. There is also a risk that landlords might lease properties to unsuitable tenants to avoid the auction process, undermining local planning objectives.
Anderson further noted, “If it were as simple as finding tenants, vacancies wouldn’t persist. This initiative tackles landlord inaction but does little to address deeper issues like declining demand and changing consumer habits.”
Creating opportunities for communities and small businesses
Despite these challenges, the government remains optimistic about the broader impact of HSRAs.
Business Secretary Jonathan Reynolds highlighted their potential to empower small businesses: “We promised to lift the shutters on our great British high streets, and we’re delivering real action to boost jobs, opportunities, and get the economy growing.”
HSRAs are part of a larger government strategy to revitalise local economies. Recent measures include freezing the small business multiplier, introducing permanently lower tax rates for retail and hospitality properties from 2026, and allocating £250 million to small business loan programmes in 2025.
This comprehensive approach is designed to foster growth and innovation across town centres. As Local Growth Minister Norris put it, “High Street Rental Auctions will put local communities first, re-energising town centres and driving local opportunities.”
As this initiative rolls out, its success will depend on overcoming resource challenges and fostering collaboration between councils, landlords, and communities.
If effectively implemented, HSRAs could mark a significant step toward reviving Britain’s high streets, ensuring they remain vibrant hubs for business and community life.
