New plans have been unveiled in the latest Queen’s Speech that could bring about significant changes to the commercial property landscape on high streets in England and Wales. The wide-ranging Levelling Up and Regeneration Bill will give local authorities the power to instigate rental auctions of vacant commercial properties in town centres and on high streets, with the aim of getting them brought back into use.
With an estimated 1 in 7 retail units across the country currently standing vacant, the new Bill could see an influx of commercial properties coming to market for rent.
The plans, which include injection of £1.7 billion into the high street in the form of temporary business rates relief for up to 400,000 retail, hospitality and leisure facilities over the next year, will also allow local councils to use Compulsory Purchase Orders to push through the re-purposing of buildings for infrastructure or housing use.
Commenting on the announcement, Prime Minister Boris Johnson said:
“High streets up and down the country have long been blighted by derelict shop fronts… We are putting that right by placing power back in the hands of local leaders and the community so our towns can be rejuvenated, levelling up opportunity and restoring neighbourhood pride.”
Forcing landlords to make their units which have been sitting empty for a year or longer available to prospective tenants should lower the cost of entry for many local independent retailers.
Whilst many will see this as a positive move, from the point of the landlord, this could negatively impact their long-term strategy. Removing the decision-making power from individual landlords is a bold move, especially when it comes to forcing the sale of a property via Compulsory Purchase Orders.
It should also be noted that leasing a commercial property via any method needs careful attention and consideration prior to agreeing on terms. In the case of a rental auction, the legal pack should be obtained and reviewed in detail. Commercial property leases can be notoriously onerous so far as the tenant’s liabilities are concerned and in an ideal world, legal advice should be sought to protect your interests.
If you are buying or selling business premises or looking to lease a new property, please contact our commercial property solicitors James O’Donnell and Callum Dalloway on 01457 761 320 or by email at email@example.com or firstname.lastname@example.org.