High Street Rental Auctions: What Landlords and Tenants Need to Know

Despondent, desolate, deserted… This is the unfortunate scene of many high streets across the UK in 2025, burdened by vacant premises and an underwhelming sense of community atmosphere. The challenges faced by our high streets are no secret. The Covid-19 pandemic exacerbated the effects of changing consumer behaviour and unfavourable economic conditions, which had already initiated the high street’s demise. In the final quarter of 2023, the Local Data Company reported that 1 in every 7 high street shops were closed nationally. Higher vacancy rates on a high street can lead to reduced footfall, which in turn intensifies the challenges faced by the high street, local businesses and the wider community.

High Street Rental Auctions – what are they?

Local authorities now have powers aimed at revitalising the high street by filling empty shops and empowering them to tackle vacancy rates. The intention is to bring vacant units back to use.

From December 2024, local authorities in England have the power to lease out qualifying high-street and town centre premises. Such powers derive from part 10 of the Levelling-Up and Regeneration Act 2023 (“the Act”) and the Local Authority (Rental Auctions) (England) and Town and Country Planning (General Permitted Development) (Amendments) Regulations 2024 (“the Regulations”).

A local authority may designate a street in its area as a high street for the purposes of the Act, if it considers that the street is important to the local economy because of a concentration of high-street uses of premises.

What is "High-Street Use"?

"High-street use" under the Act is all the typical activities you would expect to see on a busy main street or in a town centre. Generally, this means:

Shops and Offices: This includes any kind of retail shop or office.
Services for the Public: Businesses that offer services directly to the public such as a hair salon, a bank, a dry cleaner, or a travel agent.
Restaurants, cafes, pubs, takeaways and bars
Venues for public entertainment (such as a small cinema or a bowling alley), recreation centres, community halls, or meeting places.
Light Industry: Some types of manufacturing or industrial work are included, but only if they are the kind of business that can fit in well next to shops and cafes without causing nuisance issues.

Large warehouses are specifically excluded.

What Makes a Building a "Qualifying High-Street Premises"?

For a building to be considered a "qualifying high-street premises" (meaning it is suitable for these specific high-street uses) it needs to meet two conditions:

It must be situated on a street that has been officially designated as a "high street" or within a designated "town centre."
The local authority has to decide that the building itself is suitable for one of those "high-street uses."

This means that designation of a street as a high street which suitable premises are situated on must take place if a local authority wishes to use a High Street Rental Auction.

Conditions to Satisfy to use a High Street Rental Auction

The local authority must be satisfied that the premises meets the following two conditions before the High Street Rental Auction procedure can be commenced:

The vacancy condition – the premises must have been unoccupied continuously for 12 months or for at least 366 days (non-continuously) within a 24- month period; and
The local benefit condition – the local authority must be satisfied that the occupation of the premises for suitable high-street use would be beneficial to the local economy, society or environment.

In addition, the premises must be capable of achieving the “Minimum Standard.” The local authority will need to survey the premises to establish what works, if any, are required to enable a safe, stable and secure condition for occupation.

The Process

The High Street Rental Auction process begins within a 10-12 week notice period which is then followed by a 12-week auction period.

The non-statutory guidance contains a useful flowchart to assist with navigating the process but to summarise:

Notice Period

The local authority serves an initial notice on the landlord of the premises confirming that the premises has been identified as eligible for a High Street Rental Auction.
The landlord will then have an opportunity to make their own arrangements and enter into a tenancy which is subject to conditions.
If no tenancy is entered into by the landlord, the local authority can serve a final notice signifying that their intention to initiate a High Street Rental Auction. The landlord can serve a counter-notice and appeal.

Auction Period

Provided the final notice is not successfully appealed or withdrawn by the local authority, they then have 12 weeks to auction the premises and complete the tenancy contract.
Between weeks 1-2, the local authority will serve their notice of intention, set the use of the premises, provide proposed tenancy contract and tenancy to the landlord and request the premises information from them.
Between week 3-4, the local authority will begin to prepare the marketing materials (at their cost) and serve the auction pack on the landlord. The landlord is to provide the local authority with pre-contract enquiry details.
During weeks 5-10, the local authority will market the premises and log bids made my interested tenants.
In weeks 10-12, the local authority will serve bids on the landlord who will choose a successful bidder. The tenancy contract is exchanged.

After the auction

The landlord will complete any necessary works to bring the premises to the minimum standard and both parties will enter into the tenancy agreement.
The tenant will then complete their own fit-out works, as may be necessary

High Street Auctions – when are they happening?

While the legislation is now in effect, it is still a process that takes time, given the notice periods.

As of July 2025, several local authorities are now participating in pilot programmes including Westminster City Council and Camden, as “early adopters.” These early adopters are expected to champion High Street Rental Auctions and work with the government to provide guidance and best practices to other councils.

While the legal framework is in place and pilot schemes are active, it's still very early days for the actual auctioning of properties.

Will High Street Rental Auctions provide a cure?

Whether this policy remedies the issues it seeks to address remains to be seen. Whilst it can be argued that the introduction of High Street Rental Auctions will incentivise landlords to agree to private tenancies without local authority intervention, it remains to be seen whether this is enough, in light of the economic factors at play. Rising costs for redevelopment, high business rates and decreased footfall (combined with the uncertainty of the economic climate) can all discourage prospective tenants from making the decision to acquire new business premises to occupy. The effectiveness of the new rules is all based on local authorities possessing the commitment, time and resources to properly engage in the process. Without this, it is envisaged that tangible progress will be slow. There is also concern from landlords about reduced control, potential for below-market rents, mandatory repair costs, restrictions on redevelopment and lack of tenant vetting.

The high street should be a vibrant, beating heart of a community, conducive to the success of its resident businesses. Revival is vital and any policy change enacted for the purpose on revitalising our high streets should be championed. The effectiveness of High Street Rental Auctions may mean that they are not a comprehensive cure, but they may be a step in the right direction.

About the Author

Stanley Maskell is an Associate in our property law team at Laurus, specialising in commercial property law. He advises on acquisitions, disposals, leases and development projects, acting for landlords, tenants and investors. Stanley combines strong technical knowledge with a practical approach, ensuring clients receive clear, commercial advice tailored to their objectives. Read Stanley’s full profile here.

Get in Touch

If you would like advice on how High Street Rental Auctions or wider property law issues may affect you, Stanley would be pleased to help.

📧 Email: stanley.maskell@lauruslaw.co.uk

📞 Call: 020 3146 6300