The retail sector was already struggling before the pandemic, where up to 40 per cent of all retail space was estimated to be no longer needed, but the global health crisis has only exacerbated the decline.
According to a report by think tank the Centre for Policy Studies, Reshaping Spaces, these empty shops could translate into half a million average sized homes. And the potential is likely to be even greater as the estimate was made before the pandemic decimated many major high street retail brands.
By using mixed use regeneration planning, high street and unused commercial spaces can be repurposed to provide facilities such as GP surgeries, education and community centres to increase the opportunities for residential development in areas currently lacking this neighbourhood infrastructure. According to the think tank, mixed-use regeneration such as this could unleash tens of billions of pounds in private finance.
Local councils hold key
Transforming Britain’s high streets, says the CPS, lies in the hands of local councils.
Among the CPS proposals is the requirement on each council to make the first part of its new local plan a commercial assessment of the area’s needs which should be completed by the end of 2022.
Councils would work with developers and landlords to come together with an assessment of what is needed and where. This will release land, bring through mixed-use regeneration and allow land to repurposed for the required number of homes.
Business rates review
The CPS is also calling for an overhaul of business rates. According to the report, business rates are “erratic, too high, deter sensible recycling of commercial space, and are not spread evenly or fairly”.
Business rates mean taxes are seven times higher on commercial property than residential. In the retail sector business rates represent 42 per cent of all taxes paid, which the think tank says is unworkable in the aftermath of the pandemic.
Changes to the business rate retention scheme which incentivise councils to keep hold of vacant commercial premises instead of recycling them are also being called for.
Luke Hall, Minister of State for Regional Growth and Local Government said: “The role of the high street has always evolved and this year it’s even more important that we work together to support change and make sure that they are the beating heart of their local community. This can be achieved with high quality housing and leisure in addition to shops and restaurants, all of which is set out in the High Streets Strategy which was published this week.
‘This report shows how councils can repurpose retail space to help their town centres become more attractive places to live, work and visit.’
Report author and CPS head of policy Alex Morton said: “There is a real opportunity to boost the levels of homes and encourage mixed use regeneration as part of the current planning reforms. Councils need to take a lead and work with partners to see how their local commercial centres will look and create plans that can help Britain build back better.”