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How should we deal with empty shops on our high streets?

Our Research Director Claire Harding looks at why new legislation on property ownership could help to revive our high streets.

In our recent report on Community Town Centres, we show how property owners, local authorities, and residents working together can result in better and more sustainable places. It’s especially important for high streets in London and elsewhere which might otherwise be at risk of decline, particularly as businesses close as a result of the coronavirus crisis. Some of these closures have been delayed by rent holidays and government support and are likely to happen in the summer. Many of these closures will leave vacant shops and cafes behind them.

Some level of vacancies on our high streets is inevitable — businesses close and new ones take over — and may even be beneficial if it spurs new and creative use of space. But too many vacant units can make high streets feel run down and unloved, reducing footfall for the remaining spaces and undermining their role as community hubs. It is in the interests of the great majority of landlords and of local communities to keep vacancy rates low and to avoid lots of vacant units close together. No store manager wants empty shops with old newspaper in the windows on either side of them. But some delinquent landlords allow properties to stay vacant for a long time, even when alternatives are available and sometimes let them fall into disrepair. This might be because the property is a tiny part of a big portfolio and so they don’t really care that much, or it might be because they’d rather leave a property vacant than accept a lower rent for it, fearing that this would drive down takings for their other properties.

The problem gets worse when the local authority, community groups, or other local property owners can’t work out who a vacant building belongs to. This makes it impossible to negotiate with the landlord about making temporary or “meanwhile” use of the space, or even just about making necessary repairs to remove health and safety risks. It’s possible (for a fee) to find out who owns almost any given land or building from the government’s Land Registry, which must be updated whenever a property is sold, but often this just gives the name of a company. If you look it up on Companies House, it often then turns out that one company is owned by another company, which is owned by another company, and so on. Many of these companies appear to do little other than owning others, and many are based abroad where tax rates are more favourable to them and where information is even harder to come by.

Tax campaigners have been calling for years for beneficial ownership registers, so it’s possible to find out which individual or individuals are ultimately gaining from company revenues. The government said they would introduce a register in 2016 but they still haven’t brought forward legislation to do it. This would help a lot with making sure everyone pays their fair share of tax — especially important now as we need to finance coronavirus recovery. But it would also help local high streets — making it possible for an empty shop to become a community business, perhaps, or a derelict and unloved office building to become a community arts space. An empty café on a London high street might seem a long way from debates about international tax evasion and company registration rules, but they are links in the same chain: making asset ownership more transparent could be part of bringing that café back into use.

Read our Community Town Centres report

Claire Harding is Research Director at Centre for London.  Read more from her here.