Could empty shops be turned into new homes?

THE Chancellor is considering making it easier to convert empty shops into homes to tackle Britain’s housing crisis, it was reported yesterday.

Philip Hammond is said to be exploring ways to reshape town centres by relaxing rules around classifying buildings.

The Government is seeking ways to deliver on its promise to fix the ‘broken’ housing market. An announcement on planning reform could be made in the Budget on Monday, The Financial Times reported.

Advocates say it could serve as a solution to keeping high streets intact despite the decline in bricks-and-mortar shops. The Prime Minister suggested in a speech in March that more disused buildings should be reused as homes.

At the same time, there have been a string of profit warnings and collapses on the high street this year as consumers increasingly move their shopping online. More than 50,000 retail jobs have been lost this year alone. Another option would be to reform business rates to provide much-needed relief for shops, but this would come at cost to the Treasury – the levy generated £27.3billion in 201617. Mr Hammond is resisting calls to embark on a major overhaul of business rates because of the revenue they bring in.

Business rates are charged as a set percentage of a property’s estimated value on the rental market – its so- called rateable value.

Every company is automatically being hit with a 2.4 per cent rise in their rates next year, in line with last month’s inflation figure – an increase which will rake in another £728million for the taxman.

But 261,700 firms face even larger rises because their property’s rental value is judged to have gone up, according to consultant Altus Group.

Around 241,800 of them are small premises such as corner shops, which are likely to have ultra-tight margins and could be tipped over the edge by the tax hike. Mike Cherry, chairman of the Federation of Small Businesses, said: ‘ These figures show that despite welcome efforts from the Government to reduce the business rates burden for small firms, far too many still have uncertain futures because of this ridiculous levy.

‘Business rates is a regressive tax that makes life a misery for thousands of small businesses simply because they occupy a property. The Chancellor claims to be pro-business - this budget is his chance to prove it.

‘We’ve seen our high streets struggling with many businesses forced to close. They urgently need support.’

At present, a small business occupying a premises with a rateable value of less than £ 51,000 pay rates at 48p in the pound.

So a shop worth an estimated £20,000 would pay £9,600 year.

After the inflation- linked increase, the small business rate will rise to 49.2p – meaning the same shop would be charged £9,840 or £240 more.

Robert Hayton, of Altus Group, said: ‘It is time for the Chancellor to take a step back and support business through an unprecedented stimulus by freezing rate rises at the upcoming Budget.’

The Mail is campaigning for a sweeping reform of rates to level the playing field, and Chancellor Philip Hammond is under growing pressure to act in this month’s Budget.

A Treasury spokesman said it has already switched to using a different measure of inflation to calculate business rate rises, and this will save firms more than £4billion by 2023.

And the spokesman refused to comment on ‘Budget speculation’ regarding the conversion of shops.

‘Unprecedented stimulus’