Closed shops 'could be a boom for the private rental sector'

A new survey suggests that the demise of the High Street for shopping could lead to a surge in the supply of residential property to let.

The study by MRI Software, released this morning, says 66 per cent of property industry professionals believe redundant shops could be the largest available source for new homes, particularly suitable for flats to let.

Some 72 per cent of those surveyed see residential redevelopment of sites previously used by retailers giving the high street a new lease of life. 

The research - commissioned by MRI Software and entitled Charting UK Property Trends - suggests the vast majority of property investors, owners and developers believe that funding would be available for redevelopment or conversion of defunct shops, notwithstanding the political and economic uncertainty surrounding Brexit.

“The research shows we will see a far greater number of people living in town centres, which will give a boost to [remaining] retailers on the High Street while feeding other businesses such as gyms and entertainment venues” explains Dermot Briody, executive managing director for Europe at MRI Software. 

The survey took the responses of 144 senior property experts from a range of organisations, including investors/owners/developers, consultants, contractors, property managers, sales and lettings agents, service providers, and business occupiers.

“The vast majority were bullish on the outlook for the sector … Even where Brexit is concerned, the positive outweighed the negative, as two-thirds maintain that even a Hard Brexit won’t hurt their ability to get funding for property development” says Briody.

The skew towards newly-developed or newly-converted residential units on High Street is accentuated by other elements of the research.

These show that 82 per cent of the property professionals responding say Generation Rent – young adults unable to purchase a home due to high housing prices – is here to stay, with little likelihood buying conditions will improve.

The same proportion say that tenants are renting for longer, thus driving demand for higher quality properties, and an even greater proportion believe the rental sector will become more important to the overall UK residential market over the next 18 months.

Aside from residential considerations, just over four out of five respondents say co-working and shared office space operators such as WeWork are likely to be users of former retail premises in UK town and city centres.