The Intermediary – February 2025 - Flipbook - Page 36
SPECIALIST FINANCE
Opinion
Could high street
retail provide a
housing boost?
T
he high street is dying.
It’s a phrase we’ve all
heard before and likely
seen first-hand. As you
walk through your
local town centre, or
visit your nearby high street, you will
inevitably go past empty units that
would have once been full.
The reasons are well documented –
the rise of online shopping and home
deliveries, increasing energy costs and
the cost-of-living crisis, to name a few.
So, why isn’t there a viable solution
to tackle both the death of the high
street and the shortfall of homes we
have in the UK?
In recent years we’ve seen permied
development (PD) extended across a
range of property types, including
commercial property, and in 2020
it became even easier to convert
commercial spaces into homes.
During this time, we’ve seen many
commercial premises converted,
particularly offices. It’s enabled
developers to take dated buildings that
no business wanted to rent or buy, and
transform them into modern, energyefficient homes.
With the success of the office
conversion in the last decade, and
with office stock that can be easily
converted running out, could high
street retail units be the answer to the
current housing crisis facing the UK?
Converting to a solution
In the year 2023-24 there were 221,070
homes built, according to Government
data, and 8,825 of those were created
through permied development – a
sizeable contribution, but perhaps
not enough. Of these units, the
vast amount (6,695) were due to
conversions from offices, whereas just
803 were from commercial, business
and service-use buildings.
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The Intermediary | February 2025
This shows that if the conversion
of high street premises had a bigger
uptake, it could be a significant
contributor to new housing in the
coming years.
Of course, there are some barriers
to high street retail conversion.
One of the main reasons is that, for
developers, it simply isn’t as costeffective as the units tend to be much
smaller, and oen dating back to
Victorian times, making them more
challenging to convert and provide
economies of scale.
While the majority of the high
streets will be these smaller premises,
there are exceptions. Especially with
the departure of some very wellknown department stores from our
high streets in recent years.It could
be these types of units that developers
utilise to convert into homes.
Converting existing high street
units would be of great benefit for
several reasons. First, it’s oen more
sustainable to convert pre-existing
buildings and retrofit them to ensure
they are up to today’s standards than
to build from scratch, and potentially
demolish an existing building or clear
the land.
Furthermore, retail units are in
town centres or on a high street, and
therefore close to transport networks
and amenities – a big tick for many
buyers and renters. Of course, while
these won’t always be suitable for
everyone, they could complement
the kick-start to housebuilding
the Government is aiming for, by
providing developers access to existing
property, not having to find new land
in oen built-up towns and cities.
Not all high street properties
will, of course, be suitable. But
the industry has funded
imaginative schemes that
have repurposed whole
NEAL MOY
is managing director
at Paragon Development
Finance
It’s often more
sustainable to convert preexisting buildings ... than
to build from scratch”
shopping precincts, adding housing
units to the top of the building, while
upgrading the commercial properties
below. There are solutions.
We all know there’s a huge shortfall
of homes in the UK to buy and rent,
and we need innovative solutions
to address this issue. While there
are plans underway by the current
Government to build hundreds of
thousands of homes over the next
few years, we have to question where
they will be built, and if the labour
resources are available to build them,
when we have properties across the
UK in popular areas siing vacant
which can be more easily
converted. ●
