Empty shops are a big problem in many towns in the UK. They make the town look sad and can hurt local businesses. A new plan called High Street Rental Auctions (HSRAs) is trying to fix this by making it easier for new businesses to rent these empty shops.
What are High Street Rental Auctions?
High Street Rental Auctions are a new way for local councils to get empty shops filled. The government wants to help towns and cities have lively and successful shopping areas. The Levelling Up and Regeneration Act 2023 gives councils the power to make landlords rent out shops that have been empty for a long time.
Think of it like this: if a shop stays empty for over a year, and the owner isn’t trying to rent it out, the council can step in. First, the council has to decide which parts of the town centre will use these new powers. Then, they can tell the landlord they need to rent the shop out. If the landlord doesn’t, the council can auction off the lease. This means someone else can rent the shop and start a new business there.
How do High Street Rental Auctions work?
The government has provided guidance to help councils understand how to use HSRAs. Here’s a simple breakdown:
- Identifying Empty Shops: The council looks for shops that have been empty for at least a year.
- Contacting the Landlord: The council talks to the landlord to find out why the shop is empty and what they plan to do about it.
- Giving Notice: If the landlord doesn’t have a good reason for the shop being empty, the council can give them a “final letting notice.” This tells the landlord they need to rent the shop out within a certain time.
- Auctioning the Lease: If the landlord still doesn’t rent the shop out, the council can auction off the lease. This means someone else gets the right to rent the shop for a period of time.
Why are shops empty in the first place?
There are many reasons why shops might be empty. Sometimes, the rent is too high. Other times, businesses are struggling because more people are shopping online. Sometimes, the shop needs repairs, and the landlord doesn’t want to pay for them. Some experts believe that high business rates and the rise of online shopping are bigger problems than landlords not wanting to rent out their properties.
What are the benefits of High Street Rental Auctions?
High Street Rental Auctions could bring many good things to towns and cities:
- More Businesses: Empty shops filled with new businesses mean more jobs for local people.
- More Variety: New shops can bring different things to the town, making it more interesting for shoppers.
- A Better Look: Filled shops make the town look nicer and more inviting.
- Stronger Local Economy: More businesses mean more money flowing through the local economy.
Are there any downsides to High Street Rental Auctions?
Some people are worried about High Street Rental Auctions. Landlords might not like being forced to rent out their properties. They might argue that the council is interfering with their rights. There’s also a concern that the auctions might not solve the bigger problems that are causing shops to close in the first place.
Another concern is that councils might not have the money or staff to run these auctions properly. If the auctions aren’t managed well, they could end up costing the council money without actually filling the empty shops.
What are the key considerations for landlords?
If you’re a landlord with an empty shop, it’s important to understand the High Street Rental Auction process. Here are some things to keep in mind:
- Keep your property in good condition. A well-maintained property is more attractive to potential tenants.
- Respond to council inquiries promptly. If the council contacts you about your empty shop, be sure to respond and explain your plans for the property.
- Consider offering flexible lease terms. Potential tenants might be more willing to rent your property if you offer flexible lease terms, such as shorter lease periods or rent reductions.
- Be prepared to negotiate. The council might be willing to work with you to find a tenant for your property. Be prepared to negotiate the terms of the lease.
- Understand your rights. You have the right to appeal the council’s decision to auction off the lease of your property.
What are the key considerations for potential tenants?
If you’re thinking about renting an empty shop through a High Street Rental Auction, here’s what you need to know:
- Do your research. Before bidding on a lease, research the area and the potential for your business.
- Understand the terms of the lease. Make sure you understand the terms of the lease before you bid. Pay attention to the rent, the length of the lease, and any restrictions on how you can use the property.
- Be prepared to invest. You’ll likely need to invest money to renovate the property and get your business up and running.
- Have a business plan. A solid business plan will help you convince the council that you’re a good candidate to rent the property.
- Seek professional advice. Consider seeking advice from a solicitor or commercial property agent before bidding on a lease.
What is North Somerset Council doing?
North Somerset Council is one of the first councils in the UK to use High Street Rental Auction powers. They plan to use these powers in towns like Weston-super-Mare, Nailsea, and Clevedon. Before they start, they will talk to the public about which areas of the town centre should be included in the plan. This means local people will have a say in how the High Street Rental Auctions are used.
What are the details of the ‘standardised’ lease?
To make things easier, there’s a standard lease that landlords and tenants can use. This lease covers things like:
- Rent: How much the tenant will pay each month.
- Service charges: If the tenant has to pay for things like cleaning or repairs.
- Alterations: What changes the tenant can make to the shop. For example, the tenant can usually put up shelves and counters without asking the landlord.
- Landlord’s rights: The landlord can take back the property if they want to redevelop it or use it for their own business. They also have a “grace period” to find a new tenant themselves.
This standardized lease aims to simplify the process and make it easier for both landlords and tenants to agree on the terms of the rental.
Frequently Asked Questions (FAQ)
Here are some common questions about High Street Rental Auctions:
What happens if the landlord doesn’t want to rent out their shop?
If the landlord doesn’t have a good reason for the shop being empty and ignores the “final letting notice,” the council can auction off the lease. This means someone else gets the right to rent the shop, even if the landlord doesn’t agree.
How much will it cost to rent a shop through an auction?
The cost of renting a shop through an auction will depend on several factors, such as the location of the shop, its size, and its condition. You’ll need to do your research and factor in the cost of renovating the property and running your business.
Who gets the rent money from the auction?
The rent money usually goes to the landlord, but the council may take a fee for running the auction.
What if I win the auction but then can’t afford to run a business?
It’s important to have a solid business plan before you bid on a lease. If you win the auction but then can’t afford to run a business, you could lose the lease and any money you’ve invested.
Are High Street Rental Auctions a guaranteed solution?
No, High Street Rental Auctions aren’t a guaranteed solution to the empty shops crisis. They are just one tool that councils can use to try to revitalize their high streets. The success of these auctions will depend on several factors, such as the local economy, the quality of the shops on offer, and the willingness of businesses to invest in these properties.
References
Here are the resources used to create this article:
- BBC News, North Somerset Council could auction empty shops leases
- UK Parliament, Government policy on high street rental auctions
- GOV.UK, High Street Rental Auctions: Non-statutory guidance
- Government Business, What you need to know about High Street Rental Auctions
- Macfarlanes, High street rental auctions update and proposed terms of the standardised lease
Ready to be part of the change? Whether you’re a landlord, a budding entrepreneur, or a concerned citizen, the High Street Rental Auctions present an opportunity. Landlords, consider this a chance to revitalize your properties and contribute to a thriving community. Entrepreneurs, this could be your gateway to a prime location and a chance to bring your vision to life. Citizens, support these initiatives and encourage your local council to take action. Don’t wait for the high street to fade away – let’s fill those empty spaces and build a brighter future, one shop at a time! Contact your local council today to learn more about High Street Rental Auctions and how you can get involved. Let’s work together to bring life back to our high streets and create vibrant, thriving communities for everyone!
