Region suffers high levels of shop vacancies

Calls for action to tackle empty stores

YORKSHIRE IS home to some of the highest levels of empty shops in the country, new research shows.

Analysis by think tank Onward shows that only the North-East of England and Wales have poorer levels of vacant stores than Yorkshire.

In Rotherham and Grimsby, one in seven shops has been vacant for more than three years.

Across the whole region some 4,272 stores remain vacant, a vacancy rate of 17.5 per cent.

Onward says that the Government’s policy of forcing landlords to lease long-term vacant shops via a rent auction could bring up to 58,000 empty high street units back into use.

Nearly half of vacant high street units are currently owned by real estate and property companies or overseas investors

In a new briefing paper by Will Tanner, former Deputy Director of Policy in Downing Street, and James Blagden, Onward’s Chief Data Analyst, the thinktank reveals the devastating damage that empty high street shops have inflicted on struggling post-industrial towns in the North and Midlands:

High street vacancy is linked to who owns the underlying buildings.

Shops owned by investment management schemes and financial companies (banks and pension funds) have vacancy rates nearly ten times as high as the vacancy rate for shops owned by private individuals.

Overall, real estate and property companies and overseas investors account for 46 per cent of all empty shops.

The paper argues that in many cases such companies are incentivised to keep shops empty rather than let them out at lower rents, because the assets are packaged into financial products that incur penalties if the rental yield falls. As a result, rents do not fall as vacancy rises.

The paper sets out how the Government’s plan to force landlords to bring empty high street shops into use via a public auction could work:

Local authorities would be given the power to require a compulsory rent auction on any high street or shopping centre unit that has been vacant for 12 months or more. The owner of a property subject to a compulsory rent auction would be legally required to auction a temporary lease for the premises.

Prospective tenants would then offer competitive bids for the level of rent they are prepared to pay, with no reserve price. Theoretically a property could be leased for £1 a month. If a landlord does not respond or refuses to engage, the local authority would have the power to let the property on their behalf.

Mr Tanner said: “Empty shops are a blight on high streets right across the country. They aren’t only a very visible sign that the local economy is in dire need of levelling up, they are also a blow to civic pride.

“Any tenant is better than no tenant at all so the Government is right to be taking steps to address this problem by forcing commercial landlords sitting on vacant shops to make them available to the community.

“Auctioning off empty units for the benefit of start ups, community groups and charities would transform the face of high streets up and down the country and this practical plan that Onward has developed will show them how to do exactly that.”