High Street Auction Rentals

The CEO of ATCM (which Blackburn BID is a member of) Ojay McDonald, ATCM Chair, Lisa Carlson, Advisory Council Chair, Stefan Gurney, has met with officials at the Department for Levelling Up to discuss the proposal of High Street Rental Auctions (HRSAs), part of the Levelling Up and Regeneration Bill going through parliament which Catherine briefed you about recently. 

Following this discussion, we have received the latest briefing paper as the policy continues to take shape (attached). 

Key points are:-

  • The Levelling Up & Regeneration Bill is reviving our high streets by introducing HSRAs as a new permissive power for local authorities, who can run a rental auction on vacant commercial high street property that has been vacant for longer than 12 months, to require landlords to rent out properties to prospective tenants, such as local businesses or community groups.
  • They will seek to increase cooperation between Landlords and local authorities, and to make town centre tenancies more accessible and affordable for tenants, including SMEs and community groups. 
  • HSRAs are temporary, with leases between 1-5 years, and reversible, allowing local authorities to take light-touch action where regeneration efforts have stalled. They will mobilise the commercial rental market and gradually increase demand and activity, instead of having units sit empty for a long amount of time.
  • The local authority will be responsible for identifying the vacant property in their town centre or high street and would then need to issue an initial notice of intent to the landlord, followed by a grace period during which landlords can find occupants or appeal, after which the property is put under HSRA notice.   
  • The local authority will be able to run the auction themselves or appoint a third-party auctioneer agency to conduct the auction.   
  • Government is aware that many landlords already work constructively with local authorities and so we do not expect them to apply to properties with proactive landlords, but in places where high vacancy rates are a real problem and there is little cooperation. HSRAs could also help landlords who are struggling to find any tenants and might benefit from the HSRA process and the local authority support. HSRA leases could help businesses develop their brick-and-mortar presence over a period between 1-5 years, and potentially turn into long-term leases for landlords after the HSRA process.
  • Most high street properties fall under the new use class E, which includes retail, hospitality, business services, indoor sports, medical services and makerspaces, and no planning permission is needed to switch from one use to another within this use class, which can also have a mix of these uses in any one premises. We are also keen to see community uses that fall under use class F2, as well as sui generis uses such as live music venues, pubs, cinemas, wine bars.
  • We are planning comprehensive stakeholder engagement in the coming months and will work with stakeholders to inform regulations, in particular on the terms of the standardised lease and the auction process.

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