IPM hosts roundtable on High Streets Rental Auctions

7th June 2022

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On the 19th May, IPM hosted a policy roundtable on High Streets Rental Auctions (HRSA), as announced in the recent Levelling Up and Regeneration Bill.

We were joined by the team responsible for HRSA policy at the Department of Levelling Up, Housing and Communities (DLUHC). IPM invited Members, Fellows and Senior Fellows to represent various high street interests relevant to the legislation, from local authorities, property, agents and valuers, occupiers (commercial and community), Business Improvement Districts, high street users as well as academics.

This update provides a summary of the roundtable discussions, its outcomes and next steps as the HSRA legislation begins its journey through both houses and practitioners consider how it may be implemented.

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Purpose of the roundtable

The purpose of the roundtable was:

• To increase our understanding of the High Streets Rental Auctions (HRSA)
  
  
• To develop IPM’s position on HRSA on behalf of the profession of place management and leadership and identify relevant support for members
  
  
• To feedback to DLUHC and assist the development of the policy and guidance.

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Overview of High Streets Rental Auctions and future timeline

Carina Schneider, Team Lead High Streets and Urban Centres (DLUHC) presented a helpful outline of the HSRA, its rationale and a timetable for legislation and guidance to be produced.

The outline was informative and Members were reassured that DLUHC intends to consult widely to ensure secondary legislation and guidance is as effective as possible. This includes a second roundtable with IPM after DLUHC’s policy teams have reflected on IPM analysis, comments and questions.

A number of questions on the primary legislation were posed and the responses to these will be included on our HSRA policy development and implementation update page, currently being compiled.

In the main, most questions were not answered definitively because they addressed the detail which DLUHC needs to consider in its future development of legislation and guidance.

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IPM discussion

After the DLUHC representative had left the meeting, IPM members continued with a discussion designed to develop the profession’s position on the policy. This included an initial policy impact assessment which is currently being updated to include the evidence and insight of Members at the meeting.

The discussion highlighted many questions that will be helpful in guiding the development of the policy - especially in relation to government being clear about the expected impact of the policy. You can view a number of the issues discussed, outlined below.

Finally, the meeting highlighted structural and significant challenges that lie behind vacancies, especially those related to heritage and listed buildings, towns that have had high vacancy rates for many years, and vacancies where the local authority is the landlord.

The overall conclusion of the roundtable was that this was not a policy that was going to have significant impact on vacancy rates, either nationwide or in towns with a long-term vacancy problem. Therefore, the focus of IPM should continue be on promoting the more holistic approach to managing vacancy, through the development of effective partnerships between LAs, BIDs, landlords and community groups and the creation of compelling visions for transformation that will address the underlying causes of vacancy.

There are examples of specific projects across our membership for tackling vacancy in the short, medium and long term - and IPM should assist the development of both member (e.g. how to guides and frameworks) and commercial products that can assist place managers and leaders use vacancy as a catalyst of transformation.

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Key issues identified

Further details on the issues identified below will be included in IPM’s forthcoming HSRA policy page.

1. How will councils be expected to identify eligible vacant units?
2. How will potential occupiers of a vacant unit engage with the local council?
3. How will the auction process work – including selecting a winning bidder, actions if no bidders come forward, and rent/service charges?
4. Will there be measures to address/support costs of occupation (e.g. refurb, insurance etc)
5. Will there be a standard lease or selection of standard leases? (inc. rules on sub-letting)
6. Only 35% of places have local plans that designate high street/town centre area. Will there be guidance on making this designation?
7. Will there be support for councils to develop a ‘pipeline’ of potential new occupiers (from a variety of preferred uses)?

There were also a number of more fundamental place-based issues raised, as a wider context for consideration of HSRAs relative impact:

8. The economic health of high streets requires a range of tools to make them enjoyable places to visit. What does the policy aim to achieve in this context?
9. It’s clear that councils are already over-stretched and struggle to engage with individual properties and landlords. How will this be resourced?
10. Should there be guidance to councils to target vacancy – as a key issue for high streets – rather than providing an optional framework?
11. This could raise public and business expectations of council action in the face of vacant/decrepit properties, where intervening is too difficult or requires time. How will this be addressed?
12. With a short lease and no renewal rights, does the measure erode landlord and tenant protections, and if so, how can this be addressed?
13. Will the measure discourage investment in town centre property? (and does HSRA apply to shopping centres?)
14. Would it be a good opportunity to progress policy and guidance on both community-based asset development and the rates mitigation model of tackling vacancy – e.g. for arts-related/charity occupiers?
15. Similarly, could a stronger link to ESG investment goals (environmental, social and governance) in town centres be developed (as these are increasingly being prioritised by funders).

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Next steps

IPM will publish a policy impact assessment for Members and a formal policy position.

IPM will publish a live question repository, including consultation with DLUCH – to track questions raised by members and responses from Government.

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Delegates attending the roundtable

About the author

IPM

Formed in 2006, the Institute of Place Management is the international professional body that supports people committed to developing, managing and making places better.