Can the high street be saved by residential redevelop...

Like many other things, the high street developed over time as small residential settlements became towns, with more people coming to live and trade with one another.

Now online retail has arrived and removed the need for people to visit bricks-and-mortar shops. The likes of Amazon have changed the way we shop forever and there is no going back. We can now buy almost anything we want without leaving the house.

This means that we’re left with redundant retail hubs in our town centres that now need to be repurposed. According to Savills, around 12.5% of retail premises in the UK are vacant, with 40% of empty stores lying vacant for three years or more. Savills predict that retail vacancy will rise to 25% by the end of the decade unless action is taken.

Yet even though the majority of high street retail units are occupied, many now house charity shops, vape stores, and such like – very different from the vibrant retail hubs that our high streets used to be.

How can we reverse this decline of our high streets?

A new idea of the high street

To return to thriving hubs of activity, town centres need to become leisure destinations. They need restaurants, pubs and cafes, boutiques and other specialist retailers, cinemas, theatres, sports and music venues, gift and craft stores.

It will be down to small independent retailers serving up a huge range of products to create a browsers’ paradise where people want to go for a day out or an evening’s dining or entertainment.

Making town centres more residential

The secret to achieving this revitalisation of commerce is to make town centres more residential. People like living in towns that have a vibrant high street on the doorstep. So, the more residential property there is, the more independent retail there is, encouraging more residential, and so on. This could create a virtuous cycle that leads to the wider regeneration of the high street.

How do we achieve this transformation? We need to repurpose the existing buildings in our town centres to create the right balance of homes, workspaces, retail, leisure and services operating side-by-side. But the starting point has to be residential.

Planning changes

Historically, such residential development has been difficult due to strict planning regulations. However, to speed the redevelopment process up, the government has created Permitted Development Rights (PDRs) which allow the use classes of certain types of building to change without the need for a full planning application. This makes the process much quicker and easier for developers to redevelop buildings.

In most cases, however, developers must still make an application, but the LPAs have far fewer criteria on which they can object and, in some cases, they have just 56 days in which to raise any objection.

Using the ‘Class G’ PDR, it’s possible to convert the floors above a shop to residential. Furthermore, ‘Class M’ PDR allows developers to convert the ground floor of shops up to 150m² that are not deemed ‘prime retail’ into residential property.

Also in 2020, the government simplified the way buildings are classified by their use. Where previously, shops, offices, light industrial buildings, financial and professional services businesses, cafés or restaurants, clinics, health centres, day nurseries, and gyms each had their own individual use-classes, they are now lumped into one single-use class, ‘Use Class E’. This means that it’s easy to change a shop into, say, a gym without explicit permission from the LPA.

But what about new homes? In December the government proposed that, from August 1 2021, all buildings in Use Class E can be converted to residential using a new set of Permitted Development Rights. If approved, this will allow us to repurpose most buildings in our town centre without the need for planning permission.

The perfect moment for redevelopment

This utopian vision sounds amazing, but can it really be delivered? Interestingly, there’s arguably a perfect storm brewing at the moment because:

More homes are desperately needed – 300,000 per year are required according to the government.
Town centres have long been in decline and need rejuvenating.
There is an increasing number of vacant buildings in town centres.
More retailers are going bust due to the pandemic and the recession.
The retailers that remain have less need for storage on site.
Businesses are looking to downsize their office space in town and city centres, and incorporate home-working into their business model full-time. This will free up existing centralised office space and also create a demand for smaller, more local office space.
Permitted Development Rights are being created to make it much easier to repurpose unused buildings.
The government is overhauling the entire planning system to make it quicker and easier to create new homes.

As a result, there is a large incentive to develop un- or under-utilised retail space in town centres into residential and boutique retail spaces. The risk is lowered by PDRs and the number of available properties is increasing, creating a fantastic opportunity for small developers.

If we take the opportunity that now exists, we could see the increase in the development of residential property in our town centres leading a revival of the high street.

*Ritchie Clapson is co-founder of propertyCEO, a nationwide property development and training company that helps people create a successful property development business in their spare time

*He previously asked whether 2021 could be the year of the indie developer