Council to launch consultation on plans to bring vacant town centre units back into use

High Street Rental Auctions (HSRAs) aim to support the regeneration of town centres and high streets by giving councils the power to auction leases for commercial properties which have stood empty for more than 12 months within a two-year period.

The new powers allow councils to target landlords who fail to actively market or let commercial units within a reasonable timeframe - with councils able to offer one to five-year leases on such properties at auction.

A report to the council's cabinet meeting on Tuesday 24 June recommends the council designate the town centre as the HSRA 'zone' where the new powers can be enforced.  

If backed by cabinet, a public consultation on the boundaries of the designated HSRA zone looks set to be launched next month.

In order to adopt the new powers, the council must also maintain an up-to-date Vacant Shop Register for the designated HSRA zone.

Work on the register has started, with the retail sector vacancy rate in the town centre standing at 15.17 per cent* in November 2024, compared to the national average of 14.2 per cent.

*The figure rises to 24.6 per cent when including the Rugby Central shopping centre, which currently has planning permission for a partial redevelopment of the site.

Cllr Michael Moran, leader of Rugby Borough Council, said the council always aimed to work proactively with landlords to bring vacant commercial units back into use, but HSRAs allowed councils to intervene when talks with landlords ended in stalemate.

"Long-term vacant commercial units have become an issue in town centres and high streets across the country, prompting the Government to introduce new powers to support councils to tackle the problem," Cllr Moran said.

"Vacant shops, offices, restaurants and bars reduce footfall to the town centre, which in turn impacts the local economy, so we believe these new powers have an important role to play in our wider plans to regenerate the town centre.

"While we only intend to use these new powers when we have exhausted all other avenues with landlords, HSRAs offer us a powerful new tool to bring empty units back into use and breathe new life into our town centre."

To launch a HSRA, the council must serve an initial notice on a landlord which starts a ten-week period when the landlord can be involved in the letting process.

After eight weeks, if the landlord has failed to agree terms with a new tenant with the council's consent, the council can serve a final notice which - subject to appeal - means a lease can be auctioned to the highest bidder.

The Government has made funding available for 'early adopters' of HSRAs, with grants of up to £5,000 available to cover the legal, surveying and advertising costs of each auction, together with grants of up to £75,000 to carry out the necessary renovations and works to bring long-term vacant units back into use.

Cllr Jerry Roodhouse, leader of Rugby Borough Council's Liberal Democrat group, said: "I welcome the move to hold High Street Rental Auctions as it adds to the council's powers to turn Rugby town centre around."