East Riding of Yorkshire Council is poised to become the first local authority to implement High Street Rental Auctions (HSRAs) as part of its strategy to address the growing issue of empty shops in its retail areas. This initiative, enabled by the Levelling Up and Regeneration Act 2023, aims to bring long-vacant commercial properties back into active use by compelling landlords to either let these spaces or face penalties.

The council's proposal is to designate all retail centres within the Local Plan, from Bridlington to Snaith, as potential HSRAs. Under this scheme, landlords will be required to improve their properties to meet a minimum standard before they can be rented out. The council has expressed a preference for collaboration with landlords to resolve vacancies voluntarily, indicating that it aims to work collaboratively to avoid the need for coercive measures.

The new powers allow local authorities to mandate landlords to rent out properties that have been unoccupied for at least 12 months or for 366 days within a 24-month period. This is a significant move that reflects a growing trend among councils across England to leverage new legislative tools to revitalise struggling high streets. The council spokesperson noted, “Our high streets are at the heart of our communities, and we are taking proactive steps to tackle long-term vacancies and support local prosperity.”

The Implications for Landlords

For landlords, the introduction of HSRAs signifies a shift in the dynamics of commercial property management. Those holding empty retail properties may soon find themselves under increased pressure to either find tenants or risk their assets being subject to government intervention. The council's approach suggests that compliance with the new standards will be necessary to avoid punitive measures, raising questions about the financial viability of maintaining empty shops.

Moreover, the requirement to upgrade properties to specific standards raises potential costs for landlords. While government grants may be available to assist with some of these costs, there is still a significant financial burden associated with property improvements. Landlords will need to carefully evaluate their options and consider the long-term implications of either investing in upgrades or facing the consequences of non-compliance.

Market Reaction and Future Considerations

The proposed HSRAs could significantly influence the commercial property market in East Riding and potentially beyond. As councils look to rejuvenate high streets, landlords may need to adapt their strategies, possibly pivoting towards a more proactive approach in managing their properties. The success of this initiative will likely depend on landlords’ willingness to engage with local authorities and consider the potential benefits of a revitalised high street environment.

It is also essential for landlords to monitor similar initiatives in other regions, as this could hint at broader trends in commercial property regulation. As other councils observe East Riding’s approach, there may be a ripple effect, leading to similar measures being implemented in different areas. This change in the regulatory landscape could also impact investment decisions, with landlords reassessing the viability of their commercial holdings in light of new compliance requirements.

What Landlords Need to Watch

Landlords should keep a close eye on the developments surrounding the HSRA framework, particularly regarding the specific standards that will be enforced and the timelines for compliance. Understanding the financial implications of these new regulations will be crucial, especially as local authorities across the UK explore similar options for addressing vacant commercial properties.

As the situation evolves, landlords may want to engage with local property associations or legal advisors to better navigate the complexities introduced by these new regulations. The priority for landlords should be to stay informed about legislative changes and actively participate in discussions with local councils to shape the future of commercial property management in their areas.

In summary, East Riding Council’s initiative to implement HSRAs represents a significant development in the commercial property landscape, with potential consequences for landlords across England as local authorities seek to revitalise high streets and combat the challenges posed by empty shops.