The Chancellor Phillip Hammond has delivered his autumn budget and there are some positives to take for our town centres and high streets, which is struggling to compete with the fast paced online retail market.
Small businesses to benefit from business rates cuts by a third, for two years, for retail properties including pubs, restaurants and cafes in England with a rateable value below £51,000. The government believes this will provide upfront support to the high streets with up to 90% of properties set to benefit.
The cuts represent a maximum saving of around £8,000 per property per year. A retailer with an annual bill of £16,203 in 2019-20 (based on a rateable value of £33,000) will save £5,401 a year. In total the relief is worth almost £900 million to retailers.
The government recognises that high streets are a crucial part of towns and communities. Consumers changing behaviour towards the online retail market poses a significant challenge for retailers in town centres. Retailers will have to learn to adapt and be flexible to compete in such a face paced market.
To support the transformation the govern will create a £675 million Future High Streets Fund to help invest in town centres. The fund is set to aid with infrastructure, including to increase access to high streets, reduce congestion, support redevelopment around high streets and enable housing and new workspaces to be created. There is little information on how the fund will work in practice and we should expect to hear more in the coming months.
Planning laws are set to offer more flexibility in converting old unused commercial properties and shops into offices or homes, along with a new mixed use business model allowing upwards residential extensions above existing premises, that could form the vibrant high street of the future.
There are further suggestions that there may be changes to the existing use class orders to aid with the flexibility. There has however been some skepticism from surveyors and planning experts for monitoring the overall quality of work if left to developers.
The government has announced a new fund for Structures and Buildings. The new fund will see a permanent tax break for new non-residential structures and building. Relief will be provided on eligible construction costs incurred on or after 29 October 2018, at an annual rate of two percent on a straight-line basis once the property is brought into qualifying use.
Structures and buildings will include; offices, retail and wholesale premises, factories and warehouses, hotels and care homes.
If you require more information relating to legal commercial property matters, please contact Naveen Palram in the Commercial Property Team at The Sethi Partnership Solicitors.
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