Shopping is dropping - but does the government have the answer?

Recent news reports have suggested that the government plans to introduce legislation to force landlords to let out units that have been vacant for more than six months.

Indications are that these reforms would form part of the Levelling Up and Regeneration Bill, set to be announced in the Queen's Speech next month.  

The plans are apparently designed to require landlords to rent out their longer-term empty commercial properties on high streets via "a compulsory rental auction", to allow communities and businesses to take over units and reinvigorate retail areas.

Nobody disputes that high street retail is clearly facing serious challenges - with vacancies in the final quarter of 2021 at around 14.4%. However, many will be asking whether such proposals will achieve any real change or are simply another attempt by the government to lay the blame for challenging property market conditions at the doors of "big bad landlords".  

In most instances, landlords are only too keen to support tenant businesses back into retail areas. Indeed, the market is already dictating plenty of rent-free periods and other incentives for tenants willing to take new leases. However, there are wider challenges facing the sector - not least the burden of business rates, the uncertainty of the current economic climate and shoppers' changing habits and increased awareness of the need to reduce waste.

Given the complexity of these challenges, the government's proposals seem unlikely to address the crisis on our high streets in any meaningful way. Changes in the market sentiment of shoppers have been coming for a long time and it may be that retail is on a path of unavoidable change. If that is the case, the government's headline-grabbing and somewhat simplistic approach seems unlikely to be fit for purpose.  

Landlords and retailers both have a vested interest in ensuring that retail adapts to changing market conditions. The government may find it is better to let them lead the way and to listen more closely to the support they are asking for when it comes to delivering a better future for our high streets.