Number of empty shops across England and Wales has risen from 4.5 per cent to 12 per cent, says report

The number of empty shops across England and Wales has risen from 4.5 per cent to 12 per cent a year ago according to a comprehensive report by the Local Data Company that covers every area of the country.

The report, backed by the British Property Federation (BPF), shows Margate to be one of the worst hit areas with vacancies increasing from 5 per cent to 25 per cent while Derby is up from 8 per cent to 22 per cent. Despite these shocking statistics, the government has continued to tax empty properties by making the lease holders pay full business rates.

The BPF wants the complete scrapping of empty property rates (EPR) as well as re-think on changing the planning use of buildings to enable empty shops to be more efficiently used for non-retail pursuits.

The EPR tax is paid by whoever owns the lease, meaning that occupiers are also affected if they have a long term lease. The British Property Federation has said it’s the equivalent of making the unemployed pay income tax, calling again for full scrapping of the tax.

The Local Data Company survey is unequivocal evidence of how badly the property and retail sectors have been hit and demonstrates clearly how the situation has worsened since the government brought in EPR in April 2008. The report was carried out across over 700 town centres and is the most in-depth of its kind.

Small town centres sidelined
'Smaller centres have to reinvent themselves in terms of convenience and we need a rethink on change of use, accessibility and car parking. We need to properly work out what smaller towns are for, as they’ve just accumulated problems over the years,' says Liz Peace, BPF chief exeuctive.

'Second rate retailers have been found out by the recession, and as they often collect in these places that’s one reason why many smaller places have high vacancy rates. The problem is many shops won’t come back, because there isn’t the demand and the internet caters for many things previously bought on the high street.'

Review change of use needed
'We need to encourage a review of change of uses as it’s pointless having shops stand empty because planners have some vision of resuscitating high streets back to the bustling 1930s,' says Peace. 'We’re in a very sharp downturn and while these things do happen in cycles, this is the first time that a recession has occurred with internet sales at such a high point.

'It means local authorise will have to be much more flexible about building uses in high streets. It can’t now all be about shopping and will have to include more services and leisure as the mix of shops declines.'

Planning and parking
'It’s a travesty that so many local towns have cut their own throats in terms of planning charges and restrictions of use. Traffic restrictions, double yellow lines, barriers and traffic enforcement officers issuing tickets has also been the social death of many market towns.'

'Retailers want high sales densities and that means bigger city locations. In a new shopping where retailing is all to do with brands, shops have a controlled environment where the they can use the unit as a billboard – particularly in fashion and music. If you go into Topshop you see huge displays that make people feel good about themselves. If you go into HMV you see huge posters of the latest chart act. The make-up counters in Boots are all huge advertising boards and these aren’t things that can easily be recreated by smaller, local retailers.'

'The more industrial regions have suffered the greatest hits of redundancies and as a result, this has impacted on retailers, leading to vacancies doubling in the North. But all areas of the country are suffering, in particular places like Margate in the South East, which sit on the borders of big cities. The West has faired better because of less over-expansion in the boom years. Cities like Bath and Bristol have remained a lot more stable.'

'Ministers must take note of how bad the property sector has been hit by the recession, and also look specifically at how much worse things have got since they began charging empty rates last year. This is unequivocal evidence of the failure of this policy to bring vacant properties back into use, as property owners and any occupiers who hold a lease, try in vain to find new tenants. '

'Charging full business rates on empty shops is also killing of businesses. Over 15 million sq ft of space has been demolished by firms wishingt o avoid paying the tax. If empty rates were reduced and collected by local authorise rather than central government, the money could go back into the public realm and benefit the areas with high vacancy rates. But this doesn’t happen. It’s simply a money generator that is the equivalent of making the unemployed pay income tax.'

'Churn rates in the northern towns like Wakefield and Bradford are at astronomical levels, and the simple reason for this is that so many retailers are going under as the recession bites. But although 12,000 independent shops may have closed, it isn’t just small retailers. It’s everyone The likes of Woolworths and Zavvi going under has contributed to the 7,000 multiple vacancies and it demonstrates that no one is immune, no matter what we do.'

Landlords
'Landlords are doing what they can to help save support tenants and the industry has shifted massively since the last recession. Rent concessions and a more transparent approach to service charges have helped greatly, but the sad reality is that many shops are out-of-date and that many shoppers prefer the convenience of large supermarkets. There’s only so much owners can do. Many large landlords and developers are owned by pension funds and savers, so if they let shops rent-free, this has an impact for values and subsequently for what our personal investments are worth. If we want to save the high street, then it will come down to retailers taking their business back there rather than anything else. '

'With new openings down by half, it’s clear that landlords are simply not able to fill vacant shops. Taxing them on this hardship simply reduces investment in other areas and means more jobs will be lost as a greater number of firms are pushed under. The nature of property is that it is a cyclical market and few were surprised when out-of-date retailers began suffering. With so many big names dropping, it has shown that no one is invincible.'

What needs to happen?
'We cannot expect any government to subsidise our shops but it is irresponsible to press on with damaging, short-term tax hits which push firms under. Landlords are keen to do everything possible to help their occupiers stay afloat and what we need from ministers is an end to its tax on empty properties. Yes, it may raise cash in the short term, but if you’re sending firms to the wall and penalising those who want to save space to keep their businesses going, then ultimately there will be less development and fewer jobs in the longer term, raising less tax revenue.'

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