Why adding more residential properties to town centres will revitalise our High Streets

Ritchie Clapson, propertyCEO

By Ritchie Clapson CEng MIStructE, co-founder of propertyCEO – How can we reverse the decline of our high streets and make them vibrant places that people actually want to visit?

The rise of online shopping has changed the landscape and we have redundant retail hubs in our town centres that need to be repurposed. According to Savills, around 12.5 per cent of retail premises in the UK are vacant, with 40 per dent of empty stores lying vacant for three years or more. Savills predict that retail vacancy will rise to 25 per cent by the end of the decade if no action is taken.

Recreating the high street

For retail to continue playing a role, then in the absence of any need to shop in the high street, we need to create a place that shoppers want to visit (and not just for the occasional visit to the dentist or estate agent). Town centres need to become leisure destinations. They need to house restaurants, pubs and cafes, boutiques and other specialist retailers, cinemas, theatres, and sports and music venues, as well as gift and craft stores.

Returning to residential

This all sounds nice, but how do we make it happen? While it may seem counter-intuitive, achieving this revitalisation of commerce, depends on making town centres more residential.

People like living in towns with a vibrant high street on the doorstep. So, the more residential property there is, the more independent retail there is, encouraging more residential. This could create a virtuous cycle that leads to the wider regeneration of the high street.

Making redevelopment easier

To speed up the redevelopment process, 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, making the process quicker and easier for developers.

In most cases, however, developers must still make an application, but the local planning authorities (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, particularly as many shops have developed ‘just-in-time’ inventory management and no longer need these upper floors to store significant volumes of stock.

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.

In 2020, the government simplified the classification of various types of non-residential buildings and lumped them into a new ‘super-category’ called Class E. This means that it’s easy to change a shop into a restaurant, gym, or office, without explicit permission from the LPA.

But what about turning these buildings into new homes? The government has proposed that, from 1 August 2021, all buildings in Use Class E can be converted to residential using a new set of Permitted Development Rights. This is the final element which, if approved, will allow us to repurpose most of our town centre buildings without the need for planning permission.

Wider benefits

This new vision of the high street will deliver multiple benefits beyond the rejuvenation of our town centres. There is an acute housing shortage, and by turning existing unused buildings into homes, we’re not only creating new homes, but we’re also recycling our building stock and reducing the need to develop on green-belt land, thus helping preserve natural environments.

These new more vibrant communities in town centres will also help drive a reduction in crime, and remove the risk of town centres becoming ghettos. Instead, they will be places that appeal to all sectors of society: young and old, families, couples and singletons.

And, of course, it ensures that a new type of retail can continue, without threat from e-commerce and out-of-town shopping centres.

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:

  1. More homes are desperately needed – 300,000 per year are required according to the government
  2. Town centres have long been in decline and need rejuvenating
  3. There is an increasing number of vacant buildings in town centres
  4. More retailers are going bust due to the pandemic and the recession
  5. The retailers that remain have less need for storage on site
  6. 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
  7. Permitted Development Rights are being created to make it much easier to repurpose unused buildings
  8. 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.

The need for joined up thinking

An issue could be the absence of a firm plan to deliver the right balance of housing, retail, and office space in each individual town. While PDRs makes repurposing buildings easier, we don’t want our town centres to be turned into housing estates.

One potential way around this issue may be for local planning authorities (LPAs) to override PDRs entirely by using Article 4 directions. By issuing such a direction, they could require that any town centre development must have full planning permission. Unfortunately, however, this would simply bring us back to where we were before, with little incentive for developers to bother with town-centre regeneration.

Instead, there needs to be some joined-up thinking between the government and LPAs that ensures the vision is realised.

With so much change converging we could be seeing the start of a rejuvenation of our high streets – beginning with the increase in residential property and supported by a positive approach to getting the balance of development right.


ABOUT THE AUTHOR

Ritchie Clapson CEng MIStructE is a veteran property developer of almost 40 years and co-founder of propertyCEO, a nationwide property development and training company that helps people create a successful property development business in their spare time. It makes use of students’ existing life skills while teaching them the property, business, and mindset knowledge they need to undertake small scale developments successfully, with the emphasis on utilising existing permitted development rights to minimise risk and maximise returns.

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