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TownCentres

The potential impact of residential development on our town centres

By Ritchie Clapson CEng MIStructE, co-founder of propertyCEO

Like many aspects of our lives, the high street evolved to meet people’s needs over time. Most older town centres were originally a gathering of residential buildings, where small settlements gradually became towns as more people came to live and trade with one another.  

As history unfolded, many street-level buildings became shops, restaurants and cafe/bars. This concentration of retail businesses in town centres created a demand for a single retail ‘hub’ shopping and leisure.

The decline of the high street

The twentieth century brought improved transport and mobility, ultimately taking retail traffic away from town centres and allowing out-of-town retail to flourish. Jumping in a car made it just as easy to head to an out-of-town supermarket where it was easier and cheaper to park and everything was sold under one roof.

Then, at the turn of the twenty-first century, online retail arrived and removed the need for people to visit bricks-and-mortar shops at all. The likes of Amazon have changed the way we shop forever and there is no going back. We can now buy almost anything we want without leaving the house.

However, this latest retail evolution has left a challenging legacy. What we’re left with are redundant retail hubs in our town centres that now need to be repurposed. According to Savills, around 12.5% of retail premises in the UK are vacant, with 40% of empty stores lying vacant for three years or more. Savills predict that retail vacancy will rise to 25% by the end of the decade if no action is taken.

Yet, even though the majority of high street retail units are occupied, many now house charity shops, vape stores, and the like – a far cry from the diverse and bustling retail hubs that our high streets once were. And that’s the best-case scenario. Many town centres have simply become ghettos, with an increase in both crime and poverty.

The general consensus is that our town centres are at a crisis point. Something has to be done to prevent further decline and, if possible, to turn high streets once again into places we want to visit.

Redefining the high street

Essentially there are two reasons to go shopping: either you want to go, or you have to. Yet, with the rise of out-of-town retail and e-commerce, it seems unlikely that we’ll ever have to regularly shop in the high street again. It’s far more convenient to drive to a supermarket or order items online.

Of course, there are some specialist businesses like estate agents, loan shops, opticians and dentists that still reside alongside the charity shops and vape stores. But, while these businesses may be necessary, they aren’t going to draw large crowds of regular shoppers. People don’t usually want to visit these businesses; they just have to on occasion. 

So, the question arises: what do we want our high streets to look like, now that retail has moved home?

Well, if retail is still to play a role, then in the absence of any need to shop in the high street, we need to create a place that shoppers want to visit. To recapture the thriving hub of activity, town centres need to become leisure destinations. They need to house restaurants, pubs and cafes, boutiques and other specialist retailers, cinemas, theatres, and sports and music venues, as well as gift and craft stores. It will be down to small independent retailers serving up a huge range of products to create a browsers’ paradise ─ a place where people want to go for a day out or for an evening’s dining or entertainment.

A return to residential

This all sounds rather nice, but how do we make it happen? After all, left to their own devices our high streets have continued to decline. There’s no magic wand in sight. While it may sound counter-intuitive, the secret to achieving this revitalisation of commerce, is to make town centres more residential. With more people living in town centres, there is automatically more demand not only for local services, cafés and eateries, but also for local convenience stores and entertainment.

People like living in towns that have a vibrant high street on the doorstep. So, the more residential property there is, the more independent retail there is, encouraging more residential, and so on. This could create a virtuous cycle that leads to the wider regeneration of the high street.

So, how do we achieve this transformation? We need to repurpose the existing buildings in our town centres to create the right balance of homes, workspaces, retail, leisure and services operating side-by-side. But the starting point has to be residential. Because by creating attractive homes in town centres, the demand for these other shops and services follows automatically.

Historically, this residential development has been difficult due to strict planning regulations. To turn a derelict department store into apartments, for example, would require planning permission from the local planning authority (LPA) department, which are usually notoriously underfunded, overloaded and often bureaucratic.

Making redevelopment faster and easier

But help is at hand. To speed the redevelopment process up, the government has created what’s known as Permitted Development Rights (PDRs) which allow the use classes of certain types of building to change without the need for a full planning application. This makes the process much quicker and easier for developers to redevelop buildings as it reduces and sometimes removes altogether the risk of planning being refused. 

In most cases, however, developers must still make an application, but the LPAs have far fewer criteria on which they can object and, in some cases, they have just 56 days in which to raise any objection.

But what about turning these buildings into new homes? The government has thought of that. In December they proposed that, from 1st August 2021, all buildings in Use Class E can be converted to residential using a brand new set of Permitted Development Rights. This is the final piece of the jigsaw puzzle which, if approved, will allow us to repurpose most of the buildings in our town centre without the need for planning permission.

Benefits of a rejuvenated high street

This new vision of the high street will deliver multiple benefits beyond the rejuvenation of our town centres. There is an acute housing shortage, and by turning existing unused buildings into homes, we’re not only creating new homes, but we’re also recycling our building stock and reducing the need to develop on green-belt land, thus helping preserve natural environments.

Currently, many developers tend to gravitate to new build because they believe it will be easier to get permission and they don’t have to contend with the limitations presented by an existing building and a town centre location. But, by making it easier, quicker and less risky to develop brownfield sites, converting existing buildings becomes a much more attractive proposition.

The new-look high street will also encourage property investors to invest in town centre premises once more.

These new more vibrant communities will also help drive a reduction in crime, and remove the risk of town centres becoming ghettos. Instead, they will be places that appeal to all sectors of society: young and old, families, couples and singletons.

And, of course, it ensures that a new type of retail can continue, without threat from e-commerce and out-of-town shopping centres.

Potential drawbacks of redevelopment

One of the biggest historical objections to using PDRs to redevelop retail spaces into residential properties is rogue developers creating tiny, cramped flats with little natural light. However, the government has declared that, from 6th April 2021, all PDR applications must conform with National Space Standards, which sets minimum requirements on home sizes and quality.

Another hurdle is that LPAs do not keep an updated register of brownfield sites, so the scale of the development opportunity is not known and can be hard to ascertain. According to a January 2021 report by specialist regeneration developer U+I, poor brownfield land registers ‘hinder the development of new homes’. LPAs have been obliged to maintain such a register since April 2017, but it would appear they are far from up to date.

However, the most stubborn issue could be the absence of a firm plan to deliver the right balance of housing, retail, and office space in each individual town. While PDRs makes repurposing buildings easier, we don’t want our town centres to be turned into housing estates, and developers clearly cannot be relied upon to create the ideal balance of different types of property ─ they will naturally be focusing on individual projects, rather than taking on the role of town planners.

Instead, there needs to be some joined-up thinking between the government and LPAs that ensures the vision is realised. It will necessarily require LPAs to relinquish a level of control by embracing the new PDRs, but also to create both a vision and a framework that allows for regeneration to provide the kind of town centre that will work for all of us. To do this we need a focus on the bigger picture and then plot the path to achieve what is needed. There will undoubtedly be compromise involved in the process. 

ABOUT THE AUTHOR

Ritchie Clapson CEng MIStructE is a veteran property developer of almost 40 years and co-founder of propertyCEO, a nationwide property development and training company that helps people create a successful property development business in their spare time. It makes use of students’ existing life skills while teaching them the property, business, and mindset knowledge they need to undertake small scale developments successfully, with the emphasis on utilising existing permitted development rights to minimize risk and maximize returns.

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