Councils are blocking nearly half of shops-to-houses conversions

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Applications to convert UK high street shops into living accommodation went up by 37% in 2020/21, but according to research from the law firm EMW, councils rejected nearly half of developers’ conversion plans.

A world-wide issue

Recent research by international property agents Savills indicates that there’s far too much retail space in the world.

The USA it is estimated has twice as much square footage in shopping centres per capita than the rest of the world, and six times as much space as countries in Europe. Savills thinks that more than one-third of shopping malls in the USA will have to close and that likewise the UK may be ‘over spaced’ for retail by as much as 40%.

The rise in the popularity of internet purchasing and home delivery would suggest that the problem of redundant retail space in may towns is likely to get worse not better. Covid-19 has resulted in an acceleration of the trend with inflation and the cost-of-living crisis adding further to the retailers’ woes.

Changing consumer priorities

A higher proportion of discretionary spend is now going on leisure experiences rather than discretionary purchases, which will have a knock-on effect to the way people shop and therefore the amount of retail space needed in the future.

The solution to much of the problem of dying town centres, according to Savills, would seem obvious: too much retail space means conversion to other uses.

Bringing back life into urban centres with retail to residential conversions – repurposing as it has become known – can be an effective strategy in turning around the decline and increasing consumer footfall. Converting space into leisure attractions, rebuilding town centres with residential as well as office space, means that towns centres, cities centres and shopping malls can be revitalised.

The most successful projects says Savills, “are those that emphasise social value, taking a whole-place perspective that includes social spaces, ‘blended living’ and offering convenience for people keen to minimise travel.”

The most successful re-purposing developments to-date appear to be from those landlords who are willing to adapt their financial and asset models to mixed-use – retail-office-leisure-residential – while combined with long-term sustainable development. Many older properties need to be upgraded to meet the new environmental standards in any case, so there’s a good opportunity to re-purpose as well.

Conflicting priorities

Local planning priorities are perhaps quite rightly slow to change and adapt, to ensure that these changes are appropriate for individual locations, long-term. But planners and developers need to work together to ensure that local priorities are met at pace, otherwise enthusiasm and investment will simply wither away. With almost half (45%) of all change of use applications rejected by local authorities, discouragement it seems is winning the day.

What’s more, recent Government plans for town centres and retail shops are to force landlords to let-out their shops – those vacant for six months or more – to be auctioned off to the highest bidder.

EMW principal Marco Mauro is reported as saying:

“Some local authorities are hesitant about losing too much commercial space. If too many shops are lost, the value of a high street as a destination is eroded, often permanently.”

High street shop units are increasingly being targeted for conversion into homes, but as Mauro points out, many councils are fearful their areas may become simply “dormitories” turning shoppers away.

While on average nearly 15% of high street retail units remain vacant, and in some towns that figure can be well more than double, action is clearly desperately needed. It is unlikely that much of the vacant retail space in some locations will ever be taken up commercially again, so that sad fact has to be faced up to.

Mauro points out that developers stand more chance of winning planning approval if they proposed mixed-use developments rather than concentrating solely residential schemes.

His advice to developers is to go for mixed-use developments rather than these solely residential projects, which have greater appeal for local planners.

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Retail property expert is scathing on Government’s High Street plan

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The Government’s latest plans to put new life back into Britain’s “dying” high streets are “short-sighted and raise huge concerns, that’s according to a North East retail property consultancy, @Retail.

The regionally based property consultants who claim to be “changing the face of the North East’s high streets,” seem to think that the Government is driving the wrong way up a one-way street with their latest proposals in the Levelling Up and Regeneration Bill.

In particular one of the 12 key “missions” that Michael Gove has unveiled in the Government’s flagship Levelling Up White Paper, aimed at shifting the government’s focus and resources to Britain’s “forgotten communities,” is giving powers to local authorities to force landlords to rent out long-term vacant properties to prospective tenants, such as local businesses or community groups.

One in every 5 shops vacant

The North East, along with much of Britain, has seen a large rise in the number of vacant shops, and in some locations this is above the national average.

The British Retail Consortium/Local Data Company study is the latest where worrying North East data comes at a same time that other parts of the country are seeing improvements as they start to recover from the pandemic.

It underscores the Government desire to take some drastic action. But, indicates Ian Thurlbeck, director at the Newcastle-based retail property consultants, @retail, the government is going up the wrong street with this Bill.

The @retail agency which offers advice on aspects of retail property, including High Street Agency, Shopping Centre Leasing, Investment, Development, Professional Services and a strategic retail Consultancy says: “We are unique in our ability to offer ‘on the spot’ advice from a team of local experts, all of whom are from the Region and have spent the majority of their careers immersed within it.”

Major concerns

The Levelling Up and Regeneration Bill raises major concerns – under the Bill, landlords will be compelled to let out retail units that have been vacant for longer than six months, says Mr Thurlbeck.

The Government’s aim is to quickly reduce the number of boarded-up shops, while at the same time create new opportunities for local small businesses and community groups, and help to increase footfall and spending in these North East town centres.

But Ian Thurlbeck has described the move as “an unrealistic proposal that fails to take into account regional differences.” He thinks that this will result in hundreds of empty properties being auctioned off to unscrupulous tenants.

Mr Thurlbeck comments further:

“This short-sighted scheme fails to address some fundamental issues, placing the burden directly on property owners and feeding off the general sense of mistrust by people in so-called ‘greedy” landlords.

“It raises many unanswered questions. For instance, what if the tenant who wins the auction is a rogue, pays none of the outgoings and trashes the property – who picks up the bill then? And do the local authorities tasked with running the auctions have the requisite experience and expertise? Will they be willing to take responsibility if things go wrong?”

Mr Thurlbeck thinks that there are now fewer retail operators requiring high street space than previously, but the perception that hundreds of North East high streets face terminal decline is simply untrue, he says.

“There is a popular misconception that our high streets are littered with empty shops, leading to a downward spiral of neglect, decay and blight. This is not the case and here in the North East, we see many high streets that are thriving and as busy as anywhere else in the country.

“Moreover, regional vacancy rates are in line with national trends and in our experience, high street retail activity in Newton Aycliffe, Durham City, Bishop Auckland, Peterlee, Chester le Street, Stanley, Consett, Seaham and Crook among other places, where we have lately updated the council with vacancy rates for these town centres, remains robust.

“There are pockets within some of these town centres where vacancy rates exceed the national average, but I would say that this is as much a national issue as it is a North East one.”

Mr Thurlbeck also has said that landlords should not be blamed for long-term retail vacancies landlords cannot afford to have their properties vacant for extended periods – in his experience, @retail has seen 99% of landlords keen to see their property let as soon as possible.

Further, he advises:

“The alternative is to suffer the cost of rates, repairs, insurance, security and maintenance. In our experience, most landlords faced with limited demand are prepared to agree short-term, rent-free leases with charities, local organisations and other groups, who can demonstrate they will be reliable and responsible occupiers. This helps to offset these costs while searching for a more sustainable solution.

“Indeed, landlords are often keen to mitigate their outgoings on vacant space and most of @retail’s clients who are faced with a lack of demand at market rents will let to charities and other organisations simply to mitigate rates.”

[Image: Tyne Bridge, Newcastle at night]

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Oh Mr Rigsby! Creator of world most famous landlord dies aged 88

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The creator of TV’s most famous landlord, the miserly and pompous Rigsby, has died.

Eric Chappell (pictured, below), who penned the classic sitcom Rising Damp, worked for the local electricity board in the East Midlands while trying unsuccessfully to become a published writer before his breakthrough play, The Banana Box, was picked up by Yorkshire Television.

The play was inspired by a newspaper article about a black man who stayed at a hotel for a year without paying after telling them he was a prince.

When it was turned into a sitcom (and later a film), the venue evolved from a hotel to a seedy run-down boarding house and the focus switched to the miserly landlord, originally played by Wilfrid Brambell.

The landlord’s name had to be changed to Rigsby from the original Rooksby after a landlord called Rooksby threatened legal action.

Social attitudes

Chappell’s comedy challenged social attitudes of the time to become one of the great British sitcom classics with Leonard Rossiter as the landlord Rigsby, Don Warrington as Philip Smith, Frances de la Tour as the lusted-after Miss Jones, and Richard Beckinsale as the medical student Alan Moore.

Although Rossiter was notoriously difficult to work with and often dismissive of the scripts, he became a household name as the iconic Rupert Rigsby, in his holey cardigan, fantasising about past military glories and once believing that Miss Jones calling him a philistine was a compliment.

Rising Damp ran for four series in the 1970s, pipping Porridge, The Good Life and Rossiter’s other big hit, The Fall and Rise of Reginald Perrin, to the award for Best Sitcom at the 1978 Baftas.

Grantham-based Chappell went on to write a string of other hits, including Only When I Laugh, The Bounder, Duty Free and Home to Roost.

Pic credit: Youtube

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Landlords quitting sector ‘ is key reason for homelessness, not high rents – claim

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Landlords selling up or re-letting is now the biggest cause of homelessness among renters in England – and not rising rents.

New Department for Levelling Up, Housing and Communities data reveals that 31,090 households were threatened with homelessness between October and December 2021, up 7.3% on the same quarter the previous year.

This includes 5,260 households who were served a Section 21 notice, an increase of 168% on the same period in 2020 and higher than the 3,830 in October to December 2019 before Covid.

A breakdown of households needing to be rehomed because their AST had ended shows that the biggest increase was due to landlords wanting to sell or re-let the property, which more than doubled (up 146%) compared to the same quarter in 2020 and was up 19% on the same period pre-Covid. The research also found that tenancies were 40 times less likely to be ended because the tenant couldn’t afford the rent.

Timothy Douglas (pictured), head of policy and campaigns at Propertymark, says the statistics provide further evidence that the biggest issue facing the private rented sector is a lack of incentives for landlords to keep their properties in it.

“They also call into question the validity of calls for rent controls as rent increases are clearly not a major cause of homelessness,” he says.

Adds Douglas: “More challenges are coming down the line with the renters’ reform agenda, which looks likely to pave the way for the removal of Section 21.

“The UK government must study these figures very closely and ensure further reform of the sector is balanced and includes policies to maintain existing investment and encourage more.”

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Fair rent detemination?

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I have a tenant who’s been on Housing benefits since April 2005. The council have stated that his claim and the eligible rent used in the calculation is decided with regard to October Deregulated tenancies and any rent increase must be referred to the Rent Officer (HB regulations 2006 regulation 13).

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Ministers to ensure £200 energy bills relief ‘distributed fairly’ to tenants by landlords

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A new government consultation aims to study whether its planned Energy Bills Support Scheme (EBSS) will treat all tenants fairly.

The scheme, announced in February as part of a package of support to help domestic energy customers with the costs of rising energy bills, starts in October and will provide funding so that all energy suppliers can pass a £200 reduction to domestic electricity customers.

This will be recovered through electricity bills over five years starting from 2023. 

Landlords must pass on the reduction to tenants; those with a domestic electricity connection who charge ‘all inclusive’ rent, where energy costs are included, will need to ensure that both the grant payments and the levy are also passed on to tenants.

Those with tenants who share a meter point will need to ensure that both the grant received, and the subsequent levy, is shared fairly between tenants.

The consultation – which closes on 23rd May – will look at whether the government should explore issues relating to tenancy agreements, for example, if a tenant has moved into a property after the rebate has been issued.

Split bills

It will also consider a situation where tenants split and pay utility bills separately but occupy the same property, and when tenants move into another property during the five years of the rebate.

London rental platform Rentd has revealed that opting for a rental property that includes bills costs the average tenant an extra £700 a year.

It found that the cost of renting a property without bills costs an average of £1,724 per month while those that include them average £2,023 per month – 17% more. 

Just 8% of all London rental homes currently listed on the market offer bills included within the top-line cost of renting. 

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TOMORROW, are you joining the Virtual Property Exhibition?

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This is a very quick reminder about the Virtual Property Exhibition on Friday 29th April, 9.15am to 5.00pm and there is no cost to participate.

This is a once a year opportunity to update your knowledge and learn from 10 of the top UK property educators and commentators about what is happening in the UK property market right now

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‘BAN rent rises and evictions until cost of living crisis ends’, says Generation Rent

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Rent rises should be banned and Section 21 and Section 8 evictions suspended until the cost of living crisis subsides, says tenants’ advocacy group Generation Rent.

The organisation also wants to see landlords banned from requesting six or 12 months’ rent up-front – a tactic, it clams, that is used by some landlords to prevent those on benefits from renting their homes without explicitly saying so.

Generation Rent has used a raft of different data sources to back up its calls for government action including ONS stats that show 59% of renters were finding it difficult to pay energy bills last month and that nearly half were spending less on essentials such as food.

It also claims that a third of tenants recently reported to the ONS that their rent had increased over the past six months.

Other demands made by Generation Rent include unfreezing the Local Housing Allowance, restoring Discretionary Housing Payment funding to 2020-21 levels, reinstating the £20 per week Universal Credit uplift and proving funds to clear tenants’ rent arrears on top of the £65 million provided last year.

Join the conversation in the LandlordZONE Forum about rent controls.

Higher rent

“Although interest rates are rising, homeowners are able to minimise costs by remortgaging. Renters don’t have the same option: if your landlord thinks they can get a higher rent from a new tenant, there’s not much you can do. If you try to negotiate, your landlord can simply serve a Section 21 no-fault eviction notice,” says Alicia Kennedy, Director of Generation Rent.

“With renters so vulnerable to rent hikes and incomes stagnant, this causes impossible choices between paying rent and putting food on the table.

“Without a suspension of evictions and a rent freeze, the cost of living crisis will lead to spiralling rent arrears and homelessness for thousands of families.”

Read more about Section 21 evictions.

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LATEST: Govt to launch probe into problems being caused by short-lets boom

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The Government is to investigate the short term lettings sector and the problems platforms like Airbnb are causing within the wider property market and economy, it has been announced.

Issues to be examined include damage to housing supply, avoidance of health and safety regulations and anti-social behaviour by holidaymakers.

“The call for evidence will be followed by a consultation, which will enable the Government to put forward proportionate policy options based on a firm evidence base,” said housing minister Eddie Hughes (pictured).

The consultation and call for evidence is to be launched by the Department for Digital, Culture, Media and Sport (DCMS), he added, in response to a question from shadow minister Rachel Maskell.

She is worried that landlords of traditional lets are using Section 21 eviction notices to eject long-standing tenants in some areas in favour of more profitable student tenants and holiday lets.
Landlord may remember that only a few years ago the Government was largely indifferent to regulation of the short-lets sector.

Ministerial action

But a growing campaign in England to highlight the problems it is creating within holiday hotspots within the Lake District and SW coastal towns and villages, and action by the Scottish government to prevent its capital from becoming a short-let hotspot, have prompted Ministers into action.

The allure of short-lets to some landlords are very tempting – annual rental revenues can be double or even triple those of long-term lets, while the laws governing this sector are non-existent or very light and taxation lower.
Also, outside London there are no – or lighter – restrictions on the number of days a property can be let out on a short-term basis before planning permission must be sought.

Read more: the ultimate guide to short-let insurance.

Last year Airbnb tried to bat off criticism that it is encouraging more and more homeowners and landlords to rent out their properties on a short-term basis with a White Paper.

This was written following consultations with local authorities, policymakers and businesses, and its key message was that a national registration for short-let properties should be introduced – something the new DCMS initiative, which has yet to be officially launched, will take on board.

Last week Airbnb caused a stir by saying it may ask property owners using its platform to reveal if they have used Section 21 eviction to clear sitting tenants from their property in order to cash-in on the growing sector.

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Changes to the PRS in Wales – How it could apply to England?

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The new Renting Homes (Wales) Act has been published. I am wondering what people feel about the changes to Section 21 and if they feel that would be a compromise if it were implemented in England? >> https://gov.wales/housing-law-changing-renting-homes

I have copied a small part of it below:

Renting Homes (Wales) Act – Changes to evictions and notice periods
Ending a tenancy is also changing.

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