The Royal Institution of Chartered Surveyors (RICS) is delighted to have the opportunity to respond to the House of Lords Built Environment Committee Inquiry into high streets in towns and small cities.
Established in 1868, RICS is the largest organisation of its kind for professionals in property, construction, land, and related environmental issues, setting and upholding professional standards for 125,000 qualified professionals and over 10,000 firms. RICS regulates both its individual qualified professionals and those firms that have registered for regulation by RICS.
Over 80,000 of our qualified professionals work in the UK, where our goal is to deliver a healthy and vibrant property and land sector as a key pillar of a thriving economy while addressing the need for the creation of green, safe communities.
We are not a trade body; we do not represent any sectional interest, and under the terms of our Royal Charter the advice and leadership we offer is always in the public interest.
Revitalising high streets in towns and small cities is crucial for boosting economic growth and community cohesion. The RICS 2022 Commercial Real Estate Impact Report illustrates that commercial real estate directly generates £66bn in GVA, over £15bn in tax revenues and employees more than 1 million people. For every £1 spent, the sector delivers a positive return of £0.91 in GVA.[1] Yet despite this impact, a Nationwide survey in 2020 said the top words associated with high streets were ‘sad’ and ‘bleak’.[2] High streets face substantial challenges from evolving consumer behaviours, environmental concerns and outdated infrastructure, which pressure their long-term viability. Our response to this inquiry will focus on the impact that RICS Chartered Surveyors have on high streets up and down the country, as well as changes to policies that we believe will make a positive difference.
Chartered surveyors play a fundamental role on high streets, they offer comprehensive support across various aspects of planning, design, development and management. They engage in strategic planning, collaborating with local authorities and stakeholders to devise tailored regeneration plans that align with community needs and urban development objectives. Utilising their design expertise, surveyors ensure that high street spaces are not only aesthetically pleasing but also functional and accessible. They conduct valuations to assess the economic viability of regeneration projects and provide guidance on investment opportunities, ensuring that resources are allocated effectively for long-term economic and environmental sustainability. Additionally, surveyors provide expert rating advice, helping businesses navigate complex business rates regulations and ensuring fair assessment, which is crucial for their financial stability. Surveyors oversee safety standards, conducting thorough assessments to ensure compliance with regulations and mitigate risks. They also play a pivotal role in property maintenance, devising tailored maintenance plans and overseeing their execution to uphold the integrity and appeal of high street properties. Surveyors manage leases, facilitating agreements between property owners and tenants to optimise occupancy and support diverse business activities. Through their multifaceted expertise, chartered surveyors cover all aspects of high street regeneration, contributing to the creation of vibrant, sustainable and resilient environments.
To effectively tackle the challenges that high streets face, there is a need to reimage and reanalyse the impact and role of both national and local government, as well as, the purpose, size and function of high streets. There is a need for a heightened national ambition and focus on commercial property, we need to unlock more investment, drive forward more bottom-up community initiatives, explore the opportunities and impact of sustainability, reform business rates and create policies promoting healthy user focussed buildings.
1) How do you define a high street in a town or small city and what is its purpose?
Defining a high street in a town or small city entails understanding its multifaceted role beyond its traditional focus on shopping. The high street’s significance lies in its ability to foster community connections and provide a sense of place. It serves as a gathering point where residents from across the community can come together to socialise, access essential services, and participate in cultural activities. It embodies the local identity and heritage, often showcasing unique landmarks and locally owned businesses. It functions as a space for creativity and innovation, hosting festivals and markets that celebrate its culture.
A high street is more than just a commercial strip, it is a dynamic and inclusive environment that enriches community life. Its purpose is to nurture social cohesion, support economic vitality and provide a welcoming and vibrant space.
2) What should be included on high streets to meet the needs of the whole community?
To meet the needs of the whole community, high streets should offer a wide range of amenities and services that extend beyond conventional retail. It is vital to understand who uses the high street and its evolutionary nature, a variety of facilities and activities need to be reflected to cater to different interests and demographics, which will continue to shift over time, the high street is a living entity that should reflect the community it serves.
High streets should look to accommodate essential services such as healthcare provisions, including doctors' surgeries and pharmacies, ensuring residents have convenient access.
Educational institutions like libraries also play a vital role in fostering learning and knowledge-sharing within the community.
High streets can serve as cultural and recreational hubs with art galleries, museums, theatres, and community centres. These spaces offer opportunities for cultural enrichment and social interaction, contributing to the overall well-being and liveliness of the community.
To promote physical and mental well-being, high streets should feature green spaces and recreational facilities where residents can engage in outdoor activities, exercise and relaxation. Sports facilities, leisure centres enhance the quality of life for individuals of all ages.
High streets should offer spaces for small businesses, artisans and entrepreneurs to showcase their products and services. Pop-up shops, markets and boutique stores contribute to the unique character and identity of high streets while providing economic opportunities.
High streets should encompass a diverse mix of amenities, services, and activities that cater to the holistic needs of the community. Each high street is unique and needs to be looked at individually to reflect its community.
3) What are the obstacles to bringing underused property on the high streets back into use?
Bringing underused properties on high streets back into productive use requires the collaborative efforts among all stakeholders. It is essential to emphasise that no party desires empty or underused properties, including landlords. Fostering cooperation among property owners, local authorities, businesses, and community groups is paramount in revitalising high streets. Each high street is unique, as well as the properties that sit upon it, stakeholders have shared the following challenges and solutions with us:
For the financial year 2024/2025 business rates income is estimated to be £26.3 billion.[3]
The obstacles to bringing underused property on the high streets back into use are multifaceted, with taxation being a significant barrier. RICS stakeholders advocate for a taxation system based on business property rents but have highlighted the need for reform to ensure fairness. While efforts have been made by the UK and devolved governments to reform business rates valuation and administration, such as through the Non-Domestic Rating Act 2023, stakeholders argue that further reforms are necessary.
One major challenge highlighted by RICS stakeholders is the proposed 6.7% standard multiplier increase from April 2024, which has been met with disappointment, especially in a challenging economic environment for many businesses. They suggest meaningful reform of the business rates system, including lowering the level of business rates to align with global taxation systems and ensuring fairer funding for local services. Over the long-term simplifying the system by replacing individual reliefs with wholesale reform and providing full transparency to ratepayers about valuation calculations are also recommended.
Incentivising sustainable investment is another key aspect highlighted by stakeholders. They stress the importance of understanding the transition to net-zero emissions and how the business rates system can be amended to encourage sustainable investment. This includes not only providing relief for green energy generation but also supporting broader sustainable initiatives. By addressing these obstacles through meaningful reform and incentivising sustainable investment, underused properties on high streets can be brought back into productive use.
Up to 50% of commercial buildings could become stranded assets by 2035.[4] Commercial buildings account for just under 10% of UK energy consumption.[5]
An additional obstacle to bringing underused property on the high streets back into use is the lack of clarity with MEES, which pose a future uncertainty to property owners and investors. Since April 2023, non-domestic properties must meet at least an Energy Performance Certificate (EPC) rating of E, with a proposed trajectory aiming for EPC B by 2030, subject to exemptions. Our stakeholders are seeking confirmation of the projected timeline, the current proposed trajectory has raised concerns among stakeholders regarding its feasibility.
Clear, concise, and credible MEES targets are necessary to provide long-term investment confidence. The RICS Q4 2023 Commercial Property Monitor, all-property investment enquiries indicator illustrates a snapshot of a lack of confidence in investment, it shows a net balance reading of -19% in Q4, which is only marginally less negative than the figure of -21% in Q3, overseas investment enquiries also continue to slip, with all sectors seeing a decline.[6] There is a desired for a reassessment and confirmation of the timeframe and goals, which can support the UK Government’s commitment to Net Zero emissions.
To address these obstacles effectively, several actions should be taken to provide clarity and confidence for non-domestic property owners and investors. These actions include promptly publishing the Government’s response to the 2021 consultation on MEES, providing long-term certainty on MEES targets, outlining a clear and reasonable transition timeline for non-domestic properties, and reforming EPCs to accommodate the diversity of building types and sizes.
Additionally, supporting the Climate Change Committee’s recommendations on implementing a performance-based rating scheme for offices and extending it to other non-domestic building types, offering financial support for retrofit projects, and reintroducing the Energy Efficiency Taskforce are crucial steps towards achieving energy efficiency and reducing carbon emissions in non-domestic properties.
Sustainability and RICS standards
RICS 2023 Sustainability Report illustrates that 57% of respondents have reported investor demand for green buildings increasing and 53% have reported occupier demand for green buildings has also risen.[7]
Where appropriate creating a greener high street could drive investment up and vacancy rates down aligning with market demand. Using the Whole Life Carbon Assessment (WLCA) standard assessors can determine the total carbon emissions produced throughout the lifespan of a constructed asset, from its early development stages to its eventual disposal. This method offers insight into different types of carbon emissions, including embodied carbon, operational carbon, and user carbon. This visibility is crucial for accurately calculating carbon footprints and providing confidence for investors.
Furthermore, we would also recommend using the International Building Operations Standard (IBOS), which promotes best practices and efficiency in building operations and management, enhancing the performance assets. IBOS covers aspects such as maintenance, energy efficiency, health and safety, and occupant comfort. By adhering to IBOS, building owners and operators can ensure that their properties are managed effectively, leading to improved performance, reduced costs, and enhanced occupant satisfaction, mitigating the risks around underused properties.
Planning reform – Permitted Development Rights (PDR)
Some stakeholders are also considering converting long-term vacant commercial property, particularly offices, into residential units reducing the risks of buildings falling to disrepair and helping to revitalise the high street. While increasing densification could provide certain advantages, it is essential to balance these benefits against the potential risk and unintended consequences, such as disrupting the cohesive structure of the high street, the possible change of nature to the high street itself, such as its night economy and addressing historical challenges related to the quality of new residential properties. In our submission to the All-Party Parliamentary Group on Housing Market and Delivery, we advocated for a more rigorous assessment of properties post-conversion and prior to occupation to verify safety, structural integrity and quality standards.
4) Who is involved in ensuring a thriving local high street and does the current structure of Government support facilitate those groups in working together?
The task of ensuring a thriving local high street involves various stakeholders working together collaboratively. Local authorities play a crucial role in providing infrastructure and supporting businesses. Business owners, both large retailers and small independent shops, contribute to the high street’s vitality through their operations and engagement with the community. Community groups, residents, and consumers also play a significant role by supporting local businesses and advocating for initiatives that enhance the high street’s appeal and functionality.
The current structure of government support aims to facilitate collaboration among these groups, but there are often challenges in ensuring effective coordination. While initiatives such as the Future High Streets Fund and Business Improvement Districts (BID) provide avenues for partnership and investment, there may be gaps in communication and alignment between different levels of government and local stakeholders. Some of our stakeholders who are across multiple BIDs inform us there are inconsistencies between them and how effective they can be. There is room for improvement in streamlining government support mechanisms to better facilitate cooperation and synergy among the groups involved in ensuring a thriving local high street, as well as better collaboration for when high streets sit on boundaries between local authorities.
Central to any successful real estate outcome is a strategic asset management plan, and all local authorities should be required to develop this approach. Local authorities play a pivotal role in ensuring the strength of local high streets. Their ability to influence economic development through investment in public estates and infrastructure can be a catalyst for regeneration, particularly in areas experiencing decline. However, both internal and external factors are prompting a shift in traditional approaches to property asset management within the public sector. The evolving landscape calls for mandated adaptable strategies and operating models. The RICS Strategic Public Sector Property Asset Management 3rd edition offers valuable guidelines for those involved in public sector asset management, emphasising the importance of data-driven decision making and outlining key attributes of effective asset management organisations.[8] Such guidance can empower local authorities to enhance their strategic management practices, benefiting their assets and the vibrancy of local high streets and communities.
As also referenced earlier, Chartered surveyors play a fundamental role on high streets, they offer comprehensive support across various aspects of planning, design, development and management. They engage in strategic planning, collaborating with local authorities and stakeholders to devise tailored regeneration plans that align with community needs and urban development objectives. Utilising their design expertise, surveyors ensure that high street spaces are not only aesthetically pleasing but also functional and accessible. They conduct valuations to assess the economic viability of regeneration projects and provide guidance on investment opportunities, ensuring that resources are allocated effectively for long-term sustainability. Additionally, surveyors provide expert rating advice, helping businesses navigate complex business rates regulations and ensuring fair assessment, which is crucial for their financial stability. Surveyors oversee safety standards, conducting thorough assessments to ensure compliance with regulations and mitigate risks. They also play a pivotal role in property maintenance, devising tailored maintenance plans and overseeing execution to uphold the integrity and appeal of high street properties. Surveyors manage leases, facilitating agreements between property owners and tenants to optimise occupancy and support diverse business activities. Through their multifaceted expertise, chartered surveyors cover all aspects of high street regeneration, contributing to the creation of vibrant, sustainable and resilient environments.
5) What role does the planning process have in determining the success or failure of the high street locally and is it fully able to address the challenges high streets face?
The planning process plays a vital role in shaping of local high streets. It influences the layout, design, and functionality of high street developments, impacting their attractiveness, accessibility, and viability. Some stakeholders have flagged inconsistencies to planning, as well as the high cost for SMEs which may hinder the adaptive reuse of underused properties, exacerbating the issue of empty properties on the high street. Additionally, addressing sustainability concerns, such as reducing carbon emissions and promoting green building practices, is integral to the planning process. Implementing standards like WLCA could help in revitalising sustainable high streets by providing a comprehensive framework for assessing and mitigating environmental impacts.
6) What has been the impact of national level planning policies regarding high streets in the last five years and are any changes required?
Some RICS stakeholders have voiced concerns regarding the application of the sequential test, as outlined in paragraphs 87 and 88 of the National Planning Policy Framework (NPPF). Despite its intended purpose of guiding retail proposals towards town centre locations first, these assessments can sometimes be viewed as mechanical, serving as hurdles for developers to overcome. This leads to the sequential test being applied based on the availability of alternative sites rather than considering whether proposed developments could be tailored to fit town centre locations, bypassing the original intentions of the policy.
The interpretation of the July 2020 revision of the NPPF, consolidating commercial and service uses into Use Class E, has raised questions around unintended consequences. This consolidation could inadvertently permit the conversion of out-of-centre commercial spaces to retail use without considering the sequential test or scale/format requirements. This could give rise to out-of-town retail developments without planning permission, bypassing fair scrutiny of their potential impacts on town centres and local communities. Clearer guidance and enforcement mechanisms should be considered.
7) What should be done to ensure that high streets being redeveloped now are structurally and financially resilient for future societal changes?
As touch upon earlier in our answer to Q3 and Q4, we would strongly recommend the following standards be followed to maximise the opportunity for investors, developers, owners and occupiers.
8) How can spatial planning, street design and layout help to drive greater footfall to high streets?
Spatial planning, street design, and layout play integral roles on high streets. Pedestrian-friendly features such as wide, well-maintained footpaths help to create a safe, pleasant environment for users of the high street to explore. Street design should consider elements like greenery, seating areas, and street furniture, as well as the location of parking facilities and public transport.
9) Has the High Streets Taskforce been effective in providing support and expertise in high street recovery and what should this look like in the future?
No further information at this time.
10) How can transport connectivity be improved to facilitate better access to high streets and town centres and how should this be funded?
High street accessibility is critical to town centre performance and because it is not as simple as it might look, it is important to understand the basic principles. Accessibility can be defined as a combination of the (perceived) time and cost of getting to a particular place, compared with an alternative destination. Improving accessibility is therefore part of a strategy to improve the competitive position of the high street and capture a greater share of existing spending.
It is often argued that high streets are at a competitive disadvantage because visitors are subject to local authority parking charges whereas out-of-town shopping including large food stores, retail warehousing and out-of-centre malls may all provide free parking. Many local authorities have increased parking charges over the past few years. The proposed solution is often to reduce or abolish parking charges.
Unfortunately this simplistic approach may not always be effective in boosting trade for a number of reasons. Firstly, parking does cost money to provide in terms of maintenance, staffing and other costs. Secondly, the time taken to find a parking space is as important, if not more important, than the charge for the space. Reducing the charge can result in the space being occupied for longer periods by fewer users. This reduced turnover and lower availability of parking can actually deter shoppers rather than attract them. Thirdly, accessibility can be improved by looking at other parts of the journey. Improved traffic flows, changed priorities, better signage and even cleaner car parks can all improve the attractiveness of town centres. Lastly, the private car is only one mode of access and giving it undue priority can reduce accessibility for other modes, resulting in an overall reduction in footfall.
While visitors to a large food store will typically prefer to use a car, visitors to a town centre for leisure or other purposes may prefer public transport. This can be particularly important in smaller and less affluent centres in urban areas where pedestrians and public transport users make up a higher proportion of shoppers. Measures to improve accessibility for them can be more effective than cutting parking charges. Moreover, in recent years the trend has been for consumers to use their cars less and to rely on ‘top up’ visits to local food stores during the week. Clear signage is also crucial to guide shoppers effectively through the town centre, enhancing their overall experience.
A significant proportion of traffi” in ’own centres is caused by delivery vehicles. This problem has been exacerbated by the multiples’ adoption of just-in-time deliveries from remote warehouses rather than holding stock in the store. Better access arrangements and phased access during the day (and night) can improve the situation in some towns.
Parking policy, and transport policy in general, is rarely designed solely with the needs of shoppers in mind. Other considerations include the need to keep through routes free from obstruction, which may result in parking being restricted in front of shops. Some measures, like the introduction of park and ride may be designed to reduce overall congestion or rush hour flows rather than improve accessibility for shopping.
Parking allocation and charging is often a compromise between the needs of shoppers, workers and residents so it is necessary to look for imaginative solutions that reconcile these needs. One example is the use of timing restrictions for commuter parking rather than charging to govern the use of spaces. Short term parking in restricted zones can also be an effective tool.
Most transport and parking strategies are the outcome of sophisticated computerised models and these models have to make simplifying assumptions about people’s behaviour and perceptions. They cannot distinguish, for instance, between the attractiveness of a modern clean well-lit car park and a dank dirty one. As the models are relatively expensive to commission, they tend to be run infrequently and may be out-of-date. Their predictions are not always checked for accuracy after the new strategy is implemented so it is worthwhile asking the local authority for the underlying modelling to support their parking policy and to test whether this is up-to-date and accurate. While few town centre groups will have the resources to undertake a detailed review, it is relatively simple to undertake shopper surveys to understand if the parking strategy is working as predicted.
11) To what extent are the Government’s funding programmes to support high streets, such as the Town Deals and Future High Streets Fund, successful?
The Government's funding programmes, such as the Town Deals and Future High Streets Fund, aim to bolster high streets grappling with economic and social challenges. However, their impact varies, and stakeholders have stressed the importance of coordination. Beyond injecting funds, it's crucial to establish a more equitable system, like reforming business rates to ease the burden. Additionally, a national property strategy can attract foreign investment, enhancing the overall vitality of high streets.
22 March 2024
[1] https://www.rics.org/news-insights/market-surveys/rics-commercial-real-estate-impact-report
[2] https://www.nationwidemediacentre.co.uk/news/sad-and-bleak-top-sentiments-associated-with-high-streets-as-brits-yearn-for-better-days
[3] https://www.gov.uk/government/statistics/national-non-domestic-rates-collected-by-councils-in-england-forecast-2024-to-2025/national-non-domestic-rates-collected-by-councils-in-england-forecast-for-2024-to-2025
[4] https://www.rics.org/news-insights/market-surveys/rics-commercial-real-estate-impact-report
[5] https://propertyindustryalliance.org/property-data-report/
[6] https://www.rics.org/news-insights/market-surveys/global-commercial-property-monitors
[7] https://www.rics.org/news-insights/rics-sustainability-report-2023
[8] Strategic Public Sector Property Asset Management, 3rd edition (rics.org)