A mission to revive flatlining high streets

On 2 December 2024, the government implemented a significant legislative change aimed at addressing the persistent issue of commercial property vacancies in town centres and high streets across England following the Coronavirus pandemic. This new initiative, introduced through the Levelling-up and Regeneration Act 2023, grants local authorities the power to auction off leases for commercial properties that have remained unoccupied for more than a year.

The new regulations outline the procedural framework for these high street rental auctions. These regulations are designed to combat high vacancy rates and stimulate economic activity in areas facing decline.

Key aspects of the new regulations include:

1. Auction process: Local authorities are required to issue an initial ten-week letting notice, providing property owners the opportunity to secure tenants independently. If unsuccessful, a final letting notice is issued, with provisions for counter notices and appeals.

2. Eligibility criteria: Properties must meet two primary conditions to qualify for auction:

• Vacancy Condition: Premises must have been unoccupied for either 12 consecutive months or 366 non-consecutive days within a two-year period
• Local Benefit Condition: The proposed use must demonstrably benefit the local economy, society, or environment.

3. Permitted Development Rights: A new Class DB has been introduced under General Permitted Development Order (GDPO). This allows for temporary changes of use to a "suitable high-street use" for auctioned properties, enhancing flexibility and attractiveness to potential tenants.

4. Suitable high street uses: The new Class DB defines a range of acceptable uses, including:

• Retail and office spaces
• Service providers open to the public
• Food and beverage establishments
• Entertainment and recreational facilities
• Community spaces
• Light industrial uses compatible with high street environments.

It's important to note that certain restrictions apply, particularly for premises located within military explosives storage areas or safety hazard zones. Additionally, local authorities must notify planning departments of any change of use, specifying commencement and end of use dates.

While this legislation represents a potentially powerful tool for local authorities to combat vacancy rates and revive struggling high streets, its impact may take time to come to fruition. The process requires local authorities to designate specific high street areas or town centres, with a 28-day period allowed for public representations.

Property owners and developers with vacant properties are advised to monitor relevant areas for potential high street or town centre designations. A proactive approach will help stakeholders prepare for possible implications of this new legislation on their assets.

As communities and local governments begin to implement these new powers, it remains to be seen how effectively they will address the complex challenges facing our high streets. However, this represents a bold intervention and signals the government's commitment to fostering economic renewal and community vitality in town centres across England.

To discuss any of the matters discussed above or any other planning matter, please contact the team.