New High Street Rental Auction powers for Councils from 2 December 2024
The High Street Rental Auction provisions in the Levelling-up and Regeneration Act 2023 will come into effect from today (2 December 2024).
In an aim to save our diminishing high streets, the new powers will enable Councils to:
- Designate areas as high streets or town centres which are important to the local economy because of a concentration of high-street uses (such as shops, cafes, restaurants).
- Serve notice on landlords in these designated areas requiring them to let vacant premises (for a high-street use for a minimum of 1 year) if the following two conditions are met:
- the “vacancy condition” – the premises must have been vacant for at least 1 year out of the last 2 years – the use must have been substantial, sustained and involve the regular presence of people at the premises; and
- the “local benefit condition” – this is that the Council considers the occupation of the premises for suitable high-street use would be beneficial to the local economy, society or environment.
- If the landlord is unable to let the premises within 8 weeks of the notice, then the Council will be entitled to hold a Rental Auction for the letting of the premises (for a 1-5 year lease, with the rent determined by the successful bidder) within 14 weeks.
These new powers have serious muscle, allowing for Councils to enter into tenancies on behalf of landlords and granting deemed consent of superior lessors/mortgagees. There is also criminal liability for unauthorised works to premises whilst there is an active letting notice in place. Landlords will have a right of appeal against a letting notice on grounds such as the vacancy condition not being met, the Council unreasonably holding consent to a letting or the landlord requiring possession of the property for redevelopment or refurbishment works.
To support these provisions, there is a new permitted development right (Class DB: Use of qualifying high-street premises changing to a suitable high-street use) to facilitate any required change of use of the premises. As with any permitted development right, the ability to rely on the right will be subject to any conditions on the operative planning permission restricting use, which is something to look out for.
How the rental auction process will work remains unclear, with further regulations required in this area. Detailed Government Guidance is also expected in December when the provisions come into force. To date, it is understood four Councils have signed up with the Government to trial the powers and provide their feedback.
With only £1m of funding allocated to Councils collectively to implement these measures, it seems unlikely there will be sufficient resources for these powers to have the Government’s desired clout. It also feels that a complex problem may have been wrongly distilled into a simple conclusion; that it is landlords choosing not to let their premises that is leading to such low occupancy on our high streets. Other factors such as online shopping habits, market forces and tighter regulations on lettings in terms of EPCs are undoubtedly also playing their part in the high street’s downturn.
Only time will tell if these new powers are able to breathe the life back into our town centres that the Government hopes they will.
Subcribe to news and views“High streets are the beating heart of our communities. But for too long, too many have been neglected, with more and more empty lots and boarded up shopfronts.”
https://www.gov.uk/government/news/high-streets-to-be-revitalised-with-new-legal-powers
