Clare Harman Clark, the Property Section chair, wonders what Santa is likely to bring for property practitioners in 2025
As I write this, we’re lumbering towards another seasonal round of mince pies and fizz, with all eyes turning to the high street.
Looking past the festive poinsettias and last-minute stocking fillers, up and down the country we can see the desolate reality of shuttered shops. High street vacancies currently hover around 14%, considerably higher than pre-pandemic days. Official statistics suggest one in seven high street shops is currently closed. The sad fact is that this appears to be the result of a decade of lockdowns, disruptions, austerity and the relentless rise of internet shopping.
The government has long been promising action and is poised now to ‘breathe new life’ into the beleaguered sector by allowing local authorities to use High Street Rental Auctions (HSRAs) to tackle the blight of shuttered shops.
The idea, which was put forward in Part 10 of the Levelling-up and Regeneration Act 2023, is deceptively simple. From 2 December, councils will be able unilaterally to identify “persistently vacant properties in city, town and village centres” across England and (without the owner’s consent) put them up for auction. The move effectively gives the potential tenants (businesses and community groups) a “right to rent” the commercial space for one to five years (excluding security of tenure under the Landlord and Tenant Act 1954).
However, like all deceptively simple ideas (flying reindeer anyone?), the mechanics are trickier in practice. More detailed guidance is awaited, but once the shut-up shop is identified (warehouses don’t count), councils will still need to engage with the owner across a multi-month timetable of notices, property information gathering and marketing.
This legislation is largely about bringing the parties to the table. If the owner fails to engage, it can result in a criminal offence and fines. To get as far as a HSRA, the council will need to show that the premises was unoccupied for the whole of the last year (or for at least 366 days in the last two years). Vacant lot landlords may well want to take note that there’s no exemption from MEES requirements when the new lease is granted.
Early adopter local authorities (which include Darlington, Mansfield and Bournemouth) are expected to take “immediate action” to champion HSRAs. Given that most local authorities are already overburdened, however, it will be interesting to see how many HSRAs actually occur.
We’ll be considering HSRAs in more detail in the next edition of Property In Practice, but in the meantime this edition is full of Christmas gifts to keep you up to date in 2025. For example, while we wait for the publication of the Law Society’s practice note on the subject, Meena Kamath of the Chancery Lane Project outlines how you can drive climate-conscious property transactions. And with Labour vowing to make commonhold “the default tenure by the end of the parliament”, Lisa Bevan of Taylor Wessing LLP considers the plans in more detail.
